Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — TRANSPORT

Public Transport (Passenger Safety)

Ms. Richardson: asked the Secretary of State for Transport what measures he intends to take to seek to improve the wellbeing and safety of women travelling on public transport.

The Secretary of State for Transport (Mr. Nicholas Ridley): I have recently announced a new study of crime on the London Underground. I expect to receive the report and recommendations by the end of July. This study will cover the safety of women.

Ms. Richardson: The Secretary of State has taken a long time to instigate that survey. Does he realise that women are the major users of public transport? The GLC has carried out the only survey of women by women to identify the difficulties which they experience on buses, underground trains and so on, and in badly lit streets. Over three quarters of them said that they felt unsafe at night. Will the right hon. Gentleman examine the findings of the GLC and proposals from other metropolitan authorities, and improve the safety of women, by recruiting more conductors and other staff, rather than relying on machines, which cannot respond to cries for help?

Mr. Ridley: The hon. Lady is a little over-critical. We have set up a study into the problems on the Underground. The problems of bus staff are being examined, as is violence to road passenger transport staff, by another of my Department's working groups, which will report shortly. A great deal is being done to investigate what can be done, and a lot is being done. If the hon. Lady would like to go to the Bank station, she will see the plans for modernising it, making it better lit and better laid out. Those are the sorts of ways in which to prevent crime, and the hon. Lady will find that the Government are doing a lot in that direction.

Mr. McCrindle: If, as it is reported, London Regional Transport is anxious to appoint additional members of the British Transport police, will my right hon. Friend give an undertaking that he will turn a sympathetic ear to any appeal for additional funds which may be required as a result?

Mr. Ridley: The British Transport police have been increased substantially as a result of the perceived problem to which my hon. Friend refers. In the first instance such matters are for London Regional Transport or the bus operator, whoever he may be, but we are doing all that we can to assist them.

Mr. Stephen Ross: Will the Secretary of State accept that one of the things that he can do to help is the early phasing out from, Charing Cross on southern region of outdated stock with individual compartment carriages, because their use late at night worries women.

Mr. Ridley: It is for British Rail to propose replacing old stock of that sort, and if it makes an application to us for investment approval we shall consider it quickly and sympathetically.

Mr. Squire: I thank my right hon. Friend for his announcement today, which I am sure will be given a greater welcome by women in general than it was by the Opposition Front Bench. May I underline that a number of men and women are deterred from travelling on the underground and that, in a sense, the amount of deterrence is greater than the number of attacks that take place?

Mr. Ridley: I think that that is true, but I am sure that the ways that are being examined by London Regional Transport to improve the situation will all help. For some time efforts have been made to improve lighting and the safety of ticket and other staff, and to increase the presence of the British Transport police and inspectors in order to improve the situation.

Mr. Tony Banks: Has the Secretary of State read the GLC women's committee's pamphlet "Women on the Move" which, to make the point in another way from my hon. Friend the Member for Barking (Ms. Richardson), makes it clear that only 17 per cent. of women feel safe travelling on public transport at night. In order to try to increase the number of women who want to travel on the tube and buses, and feel safe doing so, will he ask London Regional Transport to drop its proposals for further one-person operated buses and the reduction of guards on tubes, both of which add to the feeling of insecurity among women travelling on London transport?

Mr. Ridley: The hon. Gentleman must understand that it is taking a little time to get the London Underground more efficient, safe, and attractive to passengers. We took the system away from the GLC only 18 months ago and we have had remarkable progress in rectifying the GLC's errors.

Mrs. Kellett-Bowman: I appreciate the efforts that my right hon. Friend has been making for the safety of women. However, the question also refers to "the wellbeing" of women. Would it not be for the wellbeing and convenience of women if there were female attendants looking after female toilets?

Mr. Ridley: I shall pass that important point on to the authorities.

Local Government Reform

Mr. Stan Thorne: asked the Secretary of State for Transport what discussions his Department has had with county officials concerning the effect of abolition of the metropolitan counties on public transport in those areas.

The Minister of State, Department of Transport (Mr. David Mitchell): There has been a continuing dialogue between my Department and the officers of local authorities and passenger transport executives.

Mr. Thorne: As that tells me nothing in answer to my question, will the Minister say what he is doing to avoid increased fares and poorer services as a consequence of the Government's policies?

Mr. Mitchell: The level of fares is a matter for the bus operator concerned.

Sir John Osborn: Is it not an error in timing that the South Yorkshire passenger transport authority has introduced proposals for a tram in Sheffield when the authority has been abolished and is running into serious deficit in its financing?

Mr. Mitchell: That is a matter for the authority, and on that matter it is answerable to its local electorate.

Mr. Crowther: Has the Minister learnt from his discussions that the effect of abolishing the South Yorkshire county council, coupled with the implementation of the last two Transport Acts, will be to treble at least

the fares, to cut services substantially and to make some hundreds of the staff redundant in an area of high unemployment? Does he regard this as a mark of progress in a civilised society?

Mr. Mitchell: It is important to get a better balance between the amount paid by the user and the amount paid by the ratepayer. The high level of rates in South Yorkshire has undoubtedly contributed to the high level of unemployment there. In South Yorkshire the subsidy on transport amounts to 62·8 per cent. of the cost in cash terms for operating the service, while only 22 per cent. comes from fares. Nowhere else in the country is there such an extraordinary state of affairs.

Mr. Robert Hughes: Will the Minister admit, openly and plainly, that the responsibility for increased fares, reductions in services and increased redundancies rests solely with the Chancellor of the Exchequer because of the expenditure limits that he has set?

Mr. Mitchell: It is for the passenger transport authority to establish the policy, and for the passenger transport executive to decide its priorities in the expenditure that it will undertake during the year as between the level of fares and the extent of service and of concessions.

Channel Tunnel

Mr. Snape: asked the Secretary of State for Transport if he has any plans to allocate additional funds to British Rail in the light of Her Majesty's Government's decision to proceed with the fixed Channel link.

Mr. Ridley: External financing limits for 1990–91 to 1992–3, the years of maximum BR capital expenditure on Channel fixed link services, have not been set, but the Government recognise that BR's investment in these services will require a higher level of external financing than would otherwise have been the case.

Mr. Snape: Will the Secretary of State concede that he said recently, in reply to my hon. Friend the Member for Aberdeen, North (Mr. Hughes), that he would not allow EFL constraints to affect British Rail investment in new rolling stock for the Channel link? Will he also accept that the Under-Secretary of State for Transport in the other place said exactly the opposite—that EFL would have to be taken into consideration? Will he sort out the departmental act, and will he give a guarantee that all the railway stock that will be needed will be built in Britain?

Mr. Ridley: The hon. Gentleman is, as always, wrong. My noble Friend said that the expenditure will have to be accommodated within the EFL—indeed, it will—and I say that the EFL will be big enough to accommodate it. I do not understand what the argument is.

Mr. Gregory: Will my right hon. Friend confirm that during the past five years the Government have given more investment support to British Rail than any previous Government? The Opposition's protests are not consistent with the present position.

Mr. Ridley: It must be extremely disappointing to the Opposition that, since 1979, more than £2·25 billion at today's prices has been invested by British Rail, plus £100 million a year on the installation of continuous welded rail. Those startling and impressive figures completely refute any charge that the Opposition might make that we have cut investment.

Mr. Robert Sheldon: To limit development in the south-east following the building of the Channel tunnel, will the right hon. Gentleman accept that some compensation to the north will be required? That can be done by the improvement of the road and rail network to serve not just the London area but to provide direct links to the north, to make up for the damage that will be caused to it by the Channel tunnel.

Mr. Ridley: The right hon. Gentleman does not seem to realise that £700 million or £800 million of railway investment will flow from the decision to build the Channel Tunnel Group's scheme. He may not know that there are no railway workshops in the south-east. They are all in the north and in the midlands. He might acknowledge the fact that those jobs will come to the areas about which he is talking. Further, if the Channel tunnel results in lower transport costs and quicker and more certain transport across the Channel, it will be of great assistance to his constituents. If he would stop trying to fight the party battle and recognise the immense advantages of what is happening, he would get on better with his constituents.

Sir John Biggs-Davison: How many additional jobs does my right hon. Friend think will result from this additional investment?

Mr. Ridley: It is hard to say precisely, but tomorrow we shall be publishing a White Paper from which my hon. Friend will discover the best guesses that we can make about extra employment and where it will occur. Of course, it will be for the many industrial companies in the midlands and the north to make sure that they win the contracts when they are put out to tender.

Dr. Marek: Does the Minister accept that there is some anxiety that the Channel fixed link will not necessarily benefit the north? If it is to benefit the north, we must have decent, first-class links across London. Will the Secretary of State consider this and ensure that British Rail provides not just links, but first-class, fast links across London so that the north and the regions can consider themselves connected to the fixed link?

Mr. Ridley: I have frequently discussed this point with the chairman of British Rail. As the opportunities which the link gives to British Rail become more widely appreciated and worked out, there will be scope for through rail services from the entire country to the entire continent. British Rail has not had such an opportunity for many a generation, and I assure the hon. Gentleman that the board is fully aware of it.

Mr. Adley: Will my right hon. Friend remind the Opposition that he has already authorised the Snow Hill link, which will be one cross-London link? Following the previous two questions from the Opposition, will my right hon. Friend invite British Rail to introduce a specific plan to make the most of the Channel tunnel for the north by using Kensington Olympia station and the west London line as a link to the Channel tunnel, and upgrading the south-eastern and Chatham line from Redhill to Reading, which would link straight through to the north and the west? Will he invite the chairman to produce a report for him?

Mr. Ridley: It is for the chairman of British Rail to say how he believes it is best to open up the opportunities which the link will provide. I cannot claim to know more than he does about the railway system. It is right that the

railways should make proposals. We shall assess them in the light of their viability and the time scale in which they would have to be built. It has not been possible to do that in the short time since the decision was made.

Mr. Robert Hughes: asked the Secretary of State for Transport when he last met the chairman of British Rail to discuss the fixed Channel link.

Mr. Stephen Ross: asked the Secretary of State for Transport if, when he next meets the chairman of the British Railways Board, he will raise with him the implications for British Rail of Her Majesty's Government's decision to proceed with a fixed Channel link; and if he will make a statement.

Mr. Ridley: I meet ihe chairman of British Rail regularly to discuss matters of mutual interest. I last discussed the Channel fixed link with him on 22 January.

Mr. Hughes: Does the Secretary of State agree that the EFL for British Rail should be set far enough ahead so that we can all see what will happen? It will enable and encourage British Rail to develop and expand services not just in the south-east of England but in the north and Scotland, and clarify the different view taken by him and his noble Friend in the other place. Will he give an assurance that the EFL will be expanded to take account of British Rail's needs for the Channel link and that other investment required by British Rail will not be curtailed as a result of the Channel link decision?

Mr. Ridley: Yes, Sir.

Mr. Stephen Ross: Can we take it, therefore, that the Secretary of State will be recommending to his Cabinet colleagues a bigger EFL for British Rail in the years ahead? In particular, will he take note of the need for further investment in the Ashford to London line? If it is to cater for the Channel tunnel and commuters, it will need a great deal of capital expenditure?

Mr. Ridley: In the relevant years—1990 to 1993—the railways' provisional programme of investment is such that, even with investment in the Channel fixed link, it will be investing less than at present. The answer to the hon. Gentleman's second point is that the costs of the Ashford line are included in the investment plans which British Rail has put forward as an immediate consequence of the Channel Tunnel Group's proposals. British Rail estimates that if it has high-speed trains working between London, Paris and Brussels the investment will be £390 million, but that if it has conventional-speed trains it will be £290 million. A decision as to which trains will be used has not yet been taken.

Mr. Gow: Are there any outstanding matters still to be settled between the Channel Tunnel Group, BR and SNCF?

Mr. Ridley: I was careful to ensure that the bones of an agreement were reached between the two railways and between the combined railways and the Channel Tunnel Group before the decision was finally taken. The agreement is that there will be a 50-50 joint venture between BR and SNCF. They will be able to decide jointly on the services, the costs, the share of the revenue and the investment. I believe that that is a thoroughly satisfactory deal for BR. BR is content with, and has agreed the


schedule of, tolls to be charged on trains passing through the Channel tunnel. I cannot at the moment speak definitely for SNCF in that respect.

Mr. Aitken: Does my right hon. Friend recall that before the announcement of the Channel tunnel decision he gave the impression of being a Scrooge-like Minister who would not allow a penny of taxpayers' money to be spent in connection with the project? Since the announcement, and in the House this afternoon, he has given a somewhat different impression—that of a Lord Bountiful who is willing to spend money on expanding the EFL and on railways for the north. Does my right hon. Friend not think that he may be in danger of suffering from a little schizophrenia?

Mr. Ridley: I know that my hon. Friend will never lack ingenuity in finding ways in which to question the Channel tunnel decision. This afternoon is no exception. I have always made it clear to the House that the essential road links and railway investment which result from the decision to build the Channel link would be accepted by the Government. We accept the need to build roads and sanction railway investment to any new port, new town or new factory where the traffic justifies increased infrastructure expenditure.

Mr. Ron Lewis: In his original answer the right hon. Gentleman admitted that there would be more funding for British Rail as a result of the Channel tunnel. Is that why he opposed the scheme?

Mr. Ridley: I did not hear the hon. Gentleman. Perhaps he could repeat his question.

Mr. Ron Lewis: There are none so deaf as those who will not hear, Mr. Speaker. The right hon. Gentleman has admitted that the Channel tunnel will mean extra funding for British Rail. Is that why he originally opposed the scheme?

Mr. Ridley: I was opposed to the original scheme 11 years ago because it was to be paid for by taxpayers. I am in favour of this scheme because it will not involve taxpayers' money for the construction of the link, and it will therefore not be at the expense of other Government programmes which could have serious consequences for public spending.

Sir Anthony Meyer: Does my right hon. Friend agree that the central question concerning the project is not whether we or the French get the most out of it, but how it can be directed so as to give the maximum benefit to both nations?

Mr. Ridley: I absolutely agree with my hon. Friend. Another question is whether the people who use the link will benefit, whether as passengers or as senders of freight. If they will not benefit, I shall be very surprised if the City finances the scheme. The fact that the City is likely to be prepared to finance the scheme is evidence of real need among users, which will be met profitably.

Mr. Leadbitter: The Secretary of State has given certain assurances about communication development concerning the fixed link, but, after all these months, he has still not convinced industrialists in the north. When he has discussions with the chairman of British Rail and other transport interests, will he take account of the concern of industrialists and trade unionists in the north and of the

Tees and Hartlepool port authority, the third largest in the United Kingdom, which has expressed its deep worry about future trade when the link is developed?

Mr. Ridley: I sometimes wonder how the Labour party, which is always calling for more investment, more infrastructure and more jobs in heavy industry, can find such contorted ways in which to disagree with the biggest infrastructure project that the Government have ever announced. They love it in general, but when projects that will provide many jobs in the north, the midlands and elsewhere are announced, they cannot even bring themselves to welcome them.

Independent Airlines (Financial Assistance)

Mr. McCrindle: asked the Secretary of State for Transport whether he has reached a decision on the Civil Aviation Authority's advice on the allocation of British Airways' financial assistance to independent airlines; and if he will make a statement.

The Parliamentary Under-Secretary of State for Transport (Mr. Michael Spicer): Yes, Sir. Based upon the Civil Aviation Authority's advice, we have recommended 15 services to British Airways for assistance. I hope that the detailed arrangements can now be completed quickly so that the new services can be started as soon as possible.

Mr. McCrindle: I welcome the development of these new services, but will my hon. Friend say what steps he has taken to ensure that the appropriate traffic rights are available? Will he confirm that the other undertaking in last year's White Paper—the development of longer-haul services in competition with British Airways—remains part of the Government's policy? What is he doing to prosecute that?

Mr. Spicer: As for traffic rights, following the new, more liberal, arrangements that we have made with Scandinavia and West Germany, traffic rights are available on all routes except Glasgow to Gothenburg and Aberdeen to Esbjerg, and we hope that they will be sorted out soon. Our policy on multiple designation was set out in the White Paper on airline competition policy and we are, of course, sticking to it.

Mr. Carter-Jones: If the Minister is so keen on multiple designation, would he be prepared to add some money to that already being paid by British Airways to finance this scheme?

Mr. Spicer: No, Sir. The agreement made by my right hon. Friend the Secretary of State last year was for £450,000 to be given to 15 routes, which is a pretty generous arrangement.

Mr. Steen: As Britain has more independent and charter airlines than any other European country, will my hon. Friend ensure that our European partners do not drive some of our independent airlines out of business by insisting on noise regulations for those airlines that fly special planes not used by other European countries?

Mr. Spicer: I am mindful, as is my hon. Friend, who does much work in that area for the industry, of the problems and the opportunities facing our airlines. In Europe our airlines are in a strong position—due in


large measure to the policies of this Government. We shall do everything that we can to ensure that those opportunities are fulfilled.

British Rail Engineering Ltd.

Mr. Gregory: asked the Secretary of State for Transport what was the value of export orders achieved by British Rail Engineering Ltd. during the most recent 12-month period for which figures are available; and how this compares with each of the preceding five years.

Mr. Ridley: BREL exports in 1985 were worth some £12 million. Exports in the years 1980 to 1984 were £34 million, £19 million, £3 million, £1·5 million and £30 million.

Mr. Gregory: Does my right hon. Friend agree that, although the figures are disappointing, the prospect for British Rail Engineering Ltd. looks good, especially with its design team? Does he further agree that the greatest obstacle to increasing exports is the negative view adopted by the conveners of the unions in opposing innovation? Will he support the management of British Rail Engineering Ltd. and help ensure maximum possible exports?

Mr. Ridley: I pay tribute to BREL for its excellent efforts to obtain more overseas work. Last year it submitted tenders and indicative bids for export orders worth £580 million. More than 400 overseas trips were made to gain business. I am aware of a large number of possible orders in the offing. I congratulate BREL on its sterling efforts to try to increase business through exports. I realise that that is difficult, because many railways operate a protective attitude to exports. Despite that, BREL is beginning to break through in many parts of the world.

Mrs. Dunwoody: How many of those export orders were lost because of the attitude of the Government and the Export Credits Guarantee Department? Does the right hon. Gentleman believe that it is sensible to tell people that they are likely to lose their jobs in BREL because of privatisation and at the same time expect them to work harder?

Mr. Ridley: The answer to the first question is none. As to the second question, no one has suggested that those people should lose their jobs. We are discussing extra efforts for the core works of BREL in the export business so that it can expand and create more jobs.

Mr. Hirst: I warmly applaud the efforts of BREL to win overseas orders. Can my right hon. Friend tell me what proportion of the export sales have been manufactured at BREL's Glasgow works, where many of my constituents work? Does he regard it as disappointing that the management have proposed the downgrading of that works to a repair unit for ScotRail instead of using the undoubted talents and abilities of that work force for export orders?

Mr. Ridley: The works at Springburn are devoted to repair and maintenance and not to new build or heavy reconstruction. British Rail envisaged BREL handing over the works to ScotRail in 1987 as the main works to repair and maintain Scottish rolling stock. As such, it is not possible for them to participate in new export services, which are confined to the core BREL works at York, Derby and Crewe.

Mr. Snape: Does the Secretary of State accept that since the Conservative party took office, the railway works at Shildon, Stratford and most of Horwich have closed? Does he accept that Swindon is scheduled shortly to close and that the works at Glasgow are also under threat? Does he accept that up to 12,000 further redundancies in BREL are threatened and that it will take more than the disgraceful slur from his creeping hon. Friend the Member for York (Mr. Gregory) to alter that?
Does the right hon. Gentleman accept that it is the Government's intention to run down BREL even further prior to privatisation and that the public sector will again pick up the bill, while the private sector picks up the orders? Railwaymen will not forget the right hon. Gentleman's role in that.

Mr. Ridley: The hon. Gentleman has been told—again he does not seem to take it in—that his pressure for increased investment in the railways, which has been met, as I said earlier, has resulted in rolling stock that does not require so much repair, maintenance and reconstruction because it is new and of a higher quality. That has been the cause of the rundown in BREL's work force. To try to increase employment in the railway engineering industry I have agreed with the chairman of British Rail the new arrangements whereby BREL's activities will be split into repair and new build. The new build part will, therefore, at least have the opportunity to gain export orders. I should have thought that the hon. Gentleman would welcome that. He never seems to welcome good news.

Coaches (Speed Governors)

Mr. Knowles: asked the Secretary of State for Transport what has been the response of the bus and coach industry to his proposal that all coaches should be fitted with speed governors.

The Parliamentary Under-Secretary of State for Transport (Mr. Peter Bottomley): The Bus and Coach Council has supported speed governors as a means of ensuring that coaches observe the motorway speed limit. The council is involved in the work now under way to establish a technical specification for speed governors.

Mr. Knowles: Is my hon. Friend aware that this measure will be a great relief to all who use the motorways, especially the MI? Will he underline his statement that the bus and coach operators will be involved closely in establishing a technical specification for speed governors?

Mr. Bottomley: Yes, Sir. I think that the introduction of speed governors will be welcome not only to other users of the motorways but to passengers on the buses and coaches and, I suspect, to drivers.

Sir Dudley Smith: Is my hon. Friend aware that buses and coaches travelling at more than 70 miles an hour are the new biggest menace on the motorways? Does he agree that anything that can be done to curb them will be very much welcomed?

Mr. Bottomley: I think that my hon. Friend speaks for many hon. Members. Public concern during the past two years has led to the proposal to introduce speed governors.

London Taxicard Scheme

Mr. Greenway: asked the Secretary of State for Transport if he will make a statement on the future of the London taxicard scheme following the agreement reached by the London co-ordinating committee of boroughs.

Mr. David Mitchell: Around 30 such letters have been received in the last four months. I have welcomed the decision of the London boroughs to continue the scheme along with other concessionary travel arrangements.

Mr. Greenway: Is it not a matter for congratulation that after the abolition of the GLC all the London borough's will continue the taxicard scheme and that concessionary travel passes for pensioners, the disabled and blind people and dial-a-ride will continue? Will my hon. Friend end, once and for all, the GLC's constant lies, which are put about at public expense, that those services will not continue after abolition?

Mr. Mitchell: My hon. Friend is correct in saying that the taxicard and dial-a-ride schemes will continue. I join him in deploring the deception by which elderly and disabled people are frightened and misled by the GLC's campaign suggesting that that would not happen.

Mr. Tony Banks: Is the hon. Gentleman aware that all the London boroughs have not agreed to support the taxicard scheme? The Tory boroughs of Sutton, Bromley, Barnet and Hillingdon have all refused to become involved in the Londonwide scheme for the taxicard. What pressure will the hon. Gentleman put on those Tory boroughs to come into the scheme, or will he be as complacent as they are?

Mr. Mitchell: That is a decision for them. It is a democratically arrived at decision, for which they will take responsibility. They will be answerable to the electorate for their decision.

Channel Tunnel

Mr. Dykes: asked the Secretary of State for Transport what representations he has received about the Government's decision to proceed with a fixed Channel link; and if he will make a statement.

Mr. David Mitchell: Since 20 January we have received a small number of letters about the fixed link from members of the public.

Mr. Dykes: Will my hon. Friend accept, once again, universal congratulations to himself and my right hon. Friend the Secretary of State, because exactly the right scheme has been chosen to give a much-needed boost to British Rail, which needs that long-term development? Does he agree that overnight this has improved Anglo-French relations and shown that my right hon. Friend the Secretary of State is a good European after all? As the French immediately announced that in the period up to the opening of the link they would spend £700 million on infrastructure, including transport infrastructure, around the Channel tunnel entrance on their side, will my hon. Friend consider again the merits of doing the same on the British side?

Mr. Mitchell: My hon. Friend is correct in saying that this will be a boost to British Rail. One of the big advantages will be the way in which freight will be able to move throughout the European network from stations

in the United Kingdom. I suggest that my right hon. Friend should wait for the White Paper tomorrow, which will give him a great deal of information on expenditure.

Mr. Boyes: Does the Minister recall that on 20 January the Secretary of State said in his statement that he would have to consider carefully the employment consequences of the development? Is he aware that people in my area find it astonishing and incredible that the Secretary of State could make an announcement about a project without considering the employment consequences?
Can the Minister assure us that if the development, to which I am opposed, goes ahead, the north-east will receive special consideration in terms not only of the rail network, but, the road network? Is he aware that there is no motorway between Darlington and Doncaster, which is something that industries in the north-east desperately need?

Mr. Mitchell: The consequences of the project on employment were taken into account by the Government and formed part of the assessment process when considering the four projects in detail. A very large volume of orders will be available to be won, but they will not be allocated to any part of the country. They must be won by people competing for them successfully.

Oral Answers to Questions — ATTORNEY-GENERAL

Westland plc

Mr. Straw: asked the Attorney-General when he was first asked to give legal advice on the proposed financial reconstruction arrangements for Westland plc; and if he will make a statement.

The Attorney-General (Sir Michael Havers): The two letters from my hon. and learned Friend the Solicitor-General to the then Secretary of State for Defence dated 6 and 7 January 1986, which have been placed in the Library, reveal the fact that advice was given by him on 31 December 1985 and on those two days. In accordance with the convention on Law Officers' advice, I am not prepared to disclose whether I or my hon. and learned Friend was asked to give legal advice on the proposed financial reconstruction arrangements for Westland plc on any other occasion.

Mr. Straw: On the leak of the Solicitor-General's letter, the Prime Minister admitted to the House on 27 January that at least by 7 January she was told
in general terms, that there had been contacts between my office and the Department of Trade and Industry."—[Official Report, 27 January 1986; Vol. 90, c. 657.]
in advance of the leak.
Did the Prime Minister at any time between 7 January and 23 January share that general knowledge with the Attorney-General or the Solicitor-General, and if so, on what date?

The Attorney-General: The only time that I had any communication with the Prime Minister was on 22 January, when the Secretary of the Cabinet gave us an outline of his report.

Mr. Hayes: Does my right hon. and learned Friend agree that this is just the sort of question that amplifies the policy of the Labour party of obeying only those laws that it finds advantageous to accept? Labour Members have


stated on numerous occasions that advice between Law Officers and members of the Cabinet is in forbidden territory.

The Attorney-General: I agree with my hon. Friend. It has been a long-standing convention that neither the fact nor the content of advice should be disclosed.

Mr. Alex Carlile: Bearing in mind that the Solicitor-General gave his advice on the usual confidential terms, will the Attorney-General tell us, first, whether the prosecution of Mr. Bernard Ingham under section 2 of the Official Secrets Act has been considered, and, secondly, why it has not been proceeded with?

The Attorney-General: As my right hon. Friend the Prime Minister said in her statement, after consultation with the Director of Public Prosecutions and senior Treasury counsel, I took the view that my guidelines would not be fulfilled by any prosecution.

Mr. Cash: Does my right hon. and learned Friend agree that the Opposition are following a line of disreputable questioning? Are they not pleading confidentiality when it suites them, while taking the opposite view when that suits them?

The Attorney-General: I agree with my hon. Friend. It is to be regretted that the statement of my right hon. Friend the Prime Minister and her speech have not been accepted as they should have been.

Mr. John Morris: When the Attorney-General replied to the House in a written answer on 16 January that the internal inquiry into the leak was
still some considerable way from being completed"—[Official Report, 16 January 1986; Vol. 89, c. 614.]
was he then aware that it was an inquiry into an official leak, and what legal advice was he then tendering? Was his Department consulted in any way on the proposed use of the Solicitor-General's letter? Are there precedents for Law Officers' letters being used as weapons for publicly chastising ministerial colleagues?

The Attorney-General: I consulted the Cabinet Secretary and expressed my view that it was essential that an inquiry into the leak should be set up. I did not know any more about the inquiry until I was informed of the results. I was informed first in summary form and then I was provided with the actual document on 22 January, the same day on which it was given to my right hon. Friend the Prime Minister. As for leaking, I have nothing to add to what has already been said. I agree entirely with what my hon. and learned Friend the Solicitor-General said in his letter of 7 January.

Mr. Winnick: asked the Attorney-General if he will make a statement on the offer of immunity to a civil servant arising from the inquiry into the leak of the letter sent by the Solicitor-General to the then Secretary of State for Defence on the Westland affair.

The Attorney-General: I refer the hon. Member to what my right hon. Friend the Prime Minister said to the House with my agreement on 23 January, and to my three written answers to the hon. Member for Middlesbrough (Mr. Bell) on 27 January.

Mr. Winnick: Why did the director of information in the Department of Trade and Industry require immunity from prosecution? Is it not clear that she was

understandably anxious not to be used as a scapegoat in this affair? Will the private secretaries who have been involved in the matter at No. 10 and the Department of Trade and Industry be given immunity, if they so require it, as a result of the latest developments? Does the Attorney-General accept that it is most unfortunate that the Solicitor-General was used in the first place by the Prime Minister in her war against the right hon. Member for Henley (Mr. Heseltine)?

The Attorney-General: There is no question of my hon. and learned Friend the Solicitor-General being used — [Interruption.] When his attention was drawn on Saturday by the then Secretary of State for Trade and Industry to the letter which had been published in full in The Times from the then Secretary of State for Defence, he telephoned the then Secretary of State for Defence and told him of his anxieties about the inaccuracies in the letter and wrote a letter, entirely of his own decision, on the Monday morning.

Mr. Winnick: Why was immunity given?

The Attorney-General: The answer to that question is the one which I have already given in a number of replies to the hon. Member for Middlesbrough.

Mr. Spencer: Does my right hon. and learned Friend agree that it is a constitutional necessity that Law Officers' advice should be confidential?

The Attorney-General: That is a long-established convention and one which the House should think carefully about before seeking to change it.

Mr. Campbell-Savours: Did the Solicitor-General discuss his letter to the then Secretary of State for Defence with the Prime Minister on 6, 7, 8 or 9 January? Secondly, if the Solicitor-General is asked to give evidence to the Select Committee on Defence, will he be able to do so?

The Attorney-General: The answer to the first part of the hon. Gentleman's supplementary question is no. There was no such communication on any of those days. As for the second part of his supplementary question, I would need notice.

Sir John Biggs-Davison: Does my right hon. and learned Friend agree that the use by any Government of leaks by public servants is demoralising to the public service? May we be assured that the practice will now cease?

The Attorney-General: I cannot give that assurance, save on behalf of my own Department. I am happy to say that there have been no leaks from my Department since I have been in office. I agree with my hon. Friend that leaking of any sort is deplorable. I agree entirely with the phrase used by my hon. and learned Friend the Solicitor-General at the end of his letter of 7 January.

Mr. John Morris: Is it a fair summary to say that the Solicitor-General was being used by other Ministers, that the Attorney-General was hoodwinked, in that he was not told the proper basis for the inquiry, that the salient facts were known to the Prime Minister from the start, and that in the bogus inquiry he was persuaded to grant immunity when he knew, or should have known, or should have been told, that there was no question of a prosecution and that it was an official leak?

The Attorney-General: There is no truth in the allegation that my hon. and learned Friend was being used.


When I was asked to grant immunity because the girl—the information officer—was refusing to give evidence unless she had immunity and her evidence was uniquely important in the pursuance of the inquiry, I was also told enough to make it clear to me that under no circumstances would I have prosecuted her in any event.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

Aid and Trade Provision

Mr. Deakins: asked the Secretary of State for Foreign and Commonwealth Affairs to what extent the aid and trade provision in 1985–86 and 1986–87 is to be funded from sources outside his Department.

The Minister for Overseas Development (Mr. Timothy Raison): The aid and trade provision is a separate allocation of funds within the aid programme. It is not funded from any other source.

Mr. Deakins: Is it not inequitable that the Department of Trade and Industry, which gets most of the benefit from the ATP, makes no contribution towards the total and rising cost of that provision? Will the Minister consider seriously for the future asking his colleagues in the Department of Trade and Industry for a contribution, either in whole or in part?

Mr. Raison: The hon. Gentleman must understand that the funds for the ATP come from public expenditure funds as a whole. It is important to remember that the ATP provides both jobs and employment in Britain, and schemes of real developmental value in the Third world.

Mr. Forman: Will my right hon. Friend tell the House whether, if the ATP were to come from a different departmental budget, for example the Department of Trade and Industry budget, the scheme, which is admirable and needs to be expanded, might fall foul of GATT rules?

Mr. Raison: My hon. Friend is broadly right. The important point is that this is aid. It counts as, and is recorded as, aid, and is directed to developmental as well as commercial ends.

Mr. Beith: Is it not the case that the ATP has virtually trebled in size, while provision for rural development has decreased? Is it not inevitable that such emphasis on the ATP will distort the priorities which the Minister's Department should have as its main concern?

Mr. Raison: The ATP has certainly increased in size over the years since it was started by the right hon. Member for Clydesdale (Dame J. Hart). However, we are now putting increasing emphasis on rural development, and I recently announced some valuable schemes.

Indonesia

Mr. Tom Clarke: asked the Secretary of State for Foreign and Commonwealth Affairs what has been the level of overseas aid to Indonesia in each of the last five years.

Mr. Raison: Gross bilateral aid to Indonesia includes capital aid, technical co-operation, aid and trade provision and investment by the Commonwealth Development Corporation. In the years 1980 to 1984 aid amounted to £11·19 million, £15·35 million, £17·22 million, £12·36 million and £28·29 million, respectively.

Mr. Clarke: Notwithstanding those generous figures and the supply of arms from this country, Indonesia has continued its policy of suppression against its own people, those in East Timor, and refugees in Papua New Guinea. What protest will be made?

Mr. Raison: The Indonesian Government are well aware of our position, namely, that we are against abuses of human rights, wherever they occur. However, the fact remains that Indonesia needs aid and can make good use of it.

Zambia

Mr. Mc Crindle: asked the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to help the Zambian economy.

Mr. Raison: We have pledged more than £30 million to the Zambian Government since last summer. In June we agreed to provide £4 million in programme aid, and £10 million to be associated with the World Bank's special facility. In December we undertook to provide a further £8 million in programme aid, and £5 million in association with the special facility. We also agreed a special grant of more than £1·5 million to permit the clearance of arrears of payments on aid loans. In addition, I have agreed to provide £3·17 million for a continuation of the integrated rural development project.

Mr. McCrindle: In welcoming that package of measures, may I ask my right hon. Friend to update the House on the present state of negotiations between the IMF and the Zambian Government, and particularly on the degree of dependence of the Zambian economy on mining, because the fall in copper prices recently must clearly have had adverse effect?

Mr. Raison: I think it is well known that the major problem facing Zambia has been the fact that its economy in earlier years was heavily dependent on copper prices, which, of course, have fallen in recent years. That has helped produce its substantial problems. Zambia is making good progress in its discussions with the IMF, and I am glad to be able to support it.

Mr. Deakins: Does the Minister intend to help Zambian agriculture by making an appropriate contribution to the international fund for agricultural development?

Mr. Raison: I am glad to say that agreement has just been reached within IFAD. I have also just announced a new contribution to the integrated rural development programme in Zambia.

Mozambique

Mr. Soames: asked the Secretary of State for Foreign and Commonwealth Affairs what further aid he proposes to make available to Mozambique.

Mr. Raison: As I told Mozambican Ministers on 28 January, I am making available to Mozambique additional capital aid of £6 million for developmental purposes and £1 million for emergency relief.

Mr. Soames: I note my right hon. Friend's answer. Will he tell the House what the existing aid programme is being spent on in Mozambique?

Mr. Raison: We are already providing £6·7 million for capital aid and £1·3 million for manpower aid. In addition a substantial amount of the money that we have pledged to the Southern African development co-ordination conference is also intended for use in Mozambique.

Mr. Bowen Wells: Will my right hon. Friend tell us the main topics of conversation with the President of Mozambique at the recent Southern African development co-ordination conference which he attended last week?

Mr. Raison: I attended that conference but the President of Mozambique did not, so I did not have any conversations with him. However, I did have conversations with his Foreign Minister, Minister of Finance and Minister of Transport. I told them about our new offer to their country. They were extremely pleased and we had very constructive discussions.

India

Mr. Janner: asked the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans to increase the allocation of funds to India for the coming 12 months.

Mr. Raison: I have no plans to do so, but India will remain by far the largest recipient of British bilateral aid.

Mr. Janner: I very much regret that there is not to be an increase in aid in view of the staggering scale of poverty and deprivation that exists in India. Will the Minister at least promise to match, by governmental funds, sums that are raised by non-governmental efforts in this country to try to aid specific projects, rural and otherwise, in India?

Mr. Raison: Our aid programme to India is very big indeed. We are the biggest bilateral donor, and in the next year we expect to spend £108 million. We are willing to take part in the joint funding of voluntary schemes, but the extent of our support far exceeds that provided by the voluntary sector, valuable though the latter is.

Bharat Aluminium Company, India

Mr. Chapman: asked the Secretary of State for Foreign and Commonwealth Affairs if he will report progress on the construction of the thermal power plant for Bharat Aluminium Company, India and the amount of aid provided by Her Majesty's Government.

Mr. Raison: Work on the project is well in hand for completion on schedule in June 1987. ODA is providing grant-aid of almost £132 million, of which £33 million comes under the aid and trade provision.

Mr. Chapman: I welcome the progress and the planned completion of the significant project within the next 18 months. Will my right hon. Friend confirm that the project will not only bring immense benefit to Indians but will have a beneficial spin-off for British consultants working abroad and for British manufacturers? Is it not such significant and tangible projects that British overseas aid should be geared to and support?

Mr. Raison: My hon. Friend is absolutely right. The project is proceeding very successfully. It will mean a valuable contribution towards the Indian power programme and also provides many jobs for British industry.

Sudan

Mr. Beith: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress of assistance being given by Her Majesty's Government for the transport of food in the Sudan.

Mr. Raison: The 100 vehicles that we provided for Save the Children Fund last year are now being used to distribute food within Darfur. The additional £5 million that I announced to the House on 13 January is earmarked for distribution costs within Darfur over the coming months. The aim is to position as much food as possible, particularly in the most remote areas, before the next rains. We are in constant touch with the other major donors and non-government agencies which are also involved in the relief operation.

Mr. Beith: Is it now the Minister's assessment that, with this assistance and the assistance coming from other sources, there will be no starvation arising directly from lack of transport within Sudan, or is he still anxious about the problem?

Mr. Raison: It would be foolish to produce a smug answer to that question. Progress will need to be watched carefully, but I believe that things are proceeding along the right lines.

Mr. Stuart Holland: During the previous Question Time on overseas development I referred to fuel for transport in Sudan. The Minister dismissed my concern as ridiculous. Will he withdraw that remark?

Mr. Raison: I do not believe that fuel itself is the major problem, but I accept that all aspects of transport must be watched closely. There is basically enough food in the Sudan, the problem is making sure that it can be purchased and distributed among the people who need it most.

Southern Africa Development Co-ordination Conference

Mr. Greenway: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Southern African development coordination conference held in Harare on 30 to 31 January.

Mr. Raison: I attended the annual consultative meeting of the Southern Africa development co-ordination conference in Harare on 30 and 31 January. During the conference I made a new pledge of £10 million, mainly to be used for strengthening the regional transport link between Malawi and the port of Dar es Salaam. That sum is in addition to the £12 million that we have pledged at previous meetings.

Mr. Greenway: I welcome the aid for improving the infrastructure of the area, but can my right hon. Friend assure me that aid is going into projects that will help the economy to become self-supporting in due course?

Mr. Raison: My hon. Friend is absolutely right. It is always a primary objective of our aid programme to help the economies concerned to strengthen, so that they can become more self-reliant.

Mr. Jack Straw: On a point of order, Mr. Speaker.

Mr. Speaker: I shall take the point of order immediately after—

Mr. Straw: My point of order arises directly out of questions.

Mr. Speaker: I know. That is why I shall take it immediately after Question Time.

British Leyland

Mr. John Smith: (by private notice) asked the Secretary of State for Trade and Industry if he will make a statement about the future of British Leyland Vehicles and possible disposals.

The Secretary of State for Trade and Industry (Mr. Paul Channon): With the approval of the BL board, discussions are in progress between BL and General Motors with the aim of creating an internationally competitive United Kingdom commercial vehicle industry and improving the long-term prospects for the constituent BL companies. These talks cover Leyland Trucks, Land Rover, Freight Rover and certain related overseas operations. Discussions are at an advanced stage, but a number of important issues remain to be settled Separate discussions are taking place with the Laird Group, which owns Metro Cammell Weyman, about the future of Leyland Bus.
As to the other BL businesses, it remains the policy of Her Majesty's Government to return them to private ownership as soon as practicable. Talks with other car manufacturers on a variety of potential business ventures are in progress; some of them are wide-ranging, but are at an exploratory stage, and it is too early to tell whether they will lead to any potential equity stake, acquisition or merger.

Mr. John Smith: The Secretary of State's statement reveals that discussions are at an advanced stage, but the House has not been told anything until today. Does not that statement confirm the fears expressed by the Shadow Chancellor of the Exchequer, my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), in a speech yesterday in Birmingham? Is it not appalling that the Government are willing even to contemplate the disposal of the largest part of the British truck and bus manufacturing industry to an American competitor? Is the right hon. Gentleman not aware that his predecessor was forced to say on 23 October last year:
after lengthy discussions, Vauxhall is not yet ready to go further in proving that it really is a British car producer."—[Official Report, 23 October 1985; Vol. 84, c. 285.]
In that context, is it not naive and foolish to expect that company to preserve any British element in what it acquires? Is there no part of British industry that is safe from the destructive purposes of the Government? Is there nothing that is not for sale? Will the Secretary of State confirm that a team from General Motors is currently in Leyland compiling a detailed dossier of our business? As the purpose of General Motors in buying Leyland would be to buy a market share, or rather to buy out the British market share and get its hands on modern facilities, which have been provided on a publicly financed basis at a cost of £320 million in the recent investment programme, will there not be large job losses in Bedford as well as Leyland? What is the estimate of the number of jobs that will be lost in both Bedford and Leyland?
What will the future be for the Land Rover and the Range Rover? Will not the job lot disposal of these prestigious British products be seen at home and abroad as a dreadful and shameful British retreat? Is it not a sad day when the British Government can even-think of such

a thing? If this deal goes ahead, will it not be the case that the British armed forces will have almost no British owned suppliers of the vehicles upon which they depend?

Mr. Speaker: Order. This is a private notice question, not a statement.

Mr. Smith: Can the Government explain why all other countries in western Europe seem to want to stay in this industry but the British Government do not? Can the Secretary of State say what protection there will be for independent British research and development? Is not this episode typical of the Government's industrial policy? It involves the destruction of jobs, the permanent loss of an industry, the loss of independent research and development and the surrender of crucial British interests.

Mr. Channon: No, Sir. I strongly repudiate many of the points that the right hon. and learned Gentleman has raised in his question. As I have already explained, no decision has been reached in the talks between British Leyland and General Motors. When firm conclusions are reached, I shall make a full statement to the House. Were a deal to be reached, General Motors would give full undertakings that the majority—[Interruption.]

Mr. Speaker: Order.

Mr. Channon: I am surprised that on an issue like this the Opposition are not anxious for me to be heard. I am trying to explain these important matters. After what the right hon. and learned Gentleman has been saying, he should be crying, not laughing.
General Motors would be willing to give undertakings that the majority of the products sold by the businesses involved would be manufactured in the United Kingdom, that the products would continue to have a high local content, that there would be a substantial level of exports, that research and development facilities would be maintained and developed in the United Kingdom, that Land Rover would retain its distinct British identity, and that an appropriate level of investment would be injected into the business to achieve competitive future models and facilities.
If these talks were to come off, it would be the Government's aim to ensure that the jobs and the future of Land Rover and these other companies were more., not less, secure. That is what we are fighting for—not for some shibboleth, like the right hon. and learned Gentleman—to try to get a viable industry that will be secure for the future.

Mr. Speaker: Order. I remind the House that private notice questions are an extension of question time.

Mr. David Madel (Bedfordshire, South-West): I welcome my right hon. Friend to his new post. As General Motors and British Leyland are well established commercial vehicle manufacturers in this country, will my right hon. Friend confirm that it is Government policy to strengthen their manufacturing base? Will he remember that General Motors has a long, distinguished history of supplying first-class defence equipment to this country for this country's needs?

Mr. Channon: My hon. Friend is right in the latter part of his question. He is also right in the first part of his question, and I very much welcome his support.

Mr. George Park: Is the Secretary of State aware of a recent early-day motion,


sponsored by Conservative Members, paying tribute to the efforts of the workers and management of British Leyland? Does he imagine that his announcement will encourage either the workers or the management to make great efforts when they know that the inevitable rationalisation will mean that their jobs are likely to go down the drain?

Mr. Channon: I believe that my announcement, and what may possibly take place, should be—I do not say that it will be—of comfort to the work force. They should realise that their future is likely to be secure in a motor industry and in a truck industry that will have secure futures. Over £2 billion has been pumped into British Leyland during the past few years. We need to ensure that this industry is able to function successfully in the foreseeable future.

Mr. John Carlisle: I support the words of my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel), on the basis that General Motors is a successful company and that the merger could be to the benefit of British Leyland and it ill befits the right hon. and learned Member for Monklands, East (Mr. Smith), who turned up at Ellesmere Port in a Japanese car to talk to officials of the company, to talk of British content. General Motors has an excellent record in Britain, and I have every confidence that should the merger take place it will be to the benefit of all workers concerned.

Mr. John Smith: On a point of order, Mr. Speaker.

Mr. Speaker: I shall take it later, if I may.

Mr. Channon: I very much welcome my hon. Friend's support, and I am grateful to him for what he said.

Mr. A. J. Beith: Does the right hon. Gentleman recognise that one of the duties that he has taken over is that of seeking to ensure that we have a viable British-owned motor industry? What has happened to the Government's philosophy of privatisation? Was it not intended to bring ownership to the employees and to the British people; not to sell off job lots in the American market?

Mr. Channon: I and my right hon. Friends are seeking to create conditions in which the companies about which I have been talking this afternoon will be able to have a more secure future than they have had in the past, and where their people will be able to look forward with confidence to the future of their companies. That is my aim. I would not allow talks to proceed unless I received satisfactory assurances to that effect, and I am sure that I will.

Mr. Iain Mills: Will my right hon. Friend confirm that it is in the the best interests of my constituents who work for Land Rover, the Austin Rover group and Unipart that the alternative to the suggestions that he has made may well be greater public investment, and that the exploration of the sort of co-operative venture that he has suggested would be beneficial to those constituents?

Mr. Channon: Yes, Sir.

Mr. Doug Hoyle: Why does the right hon. Gentleman believe that it is so good for the employees that no talks have taken place with the trade

unions? Indeed, it has been denied to the trade unions that talks are taking place. What does the right hon. Gentleman mean when he says that the majority of products will be manufactured here? What will be the effect on the component industry, particularly in view of General Motors' poor record on buying components in Britain? Will he confirm that the bus and coach division could go to the wall, with the loss of 1,000 jobs? Does it not prove that in relation to the manufacturing industry the Government are not bothered about running the estate but only with selling the valuables in the manor house?

Mr. Channon: No, Sir. It means no such thing. It means that we are trying to achieve a situation in which the employment prospects and wellbeing of those in the companies concerned will be better rather than worse in the future. If a deal with General Motors were to be reached—and that is by no means certain—I shall have to be satisfied on the point that the hon. Gentleman raised about the majority of the products. We shall need to have a proper understanding about them.

Mr. Patrick Cormack: Does my right hon. Friend, whom I welcome to his post, think that British shareholders might be interested in the Range Rover and Land Rover, and for the rest could there be a European solution?

Mr. Channon: That is an ingenious idea which my hon. Friend, with his ingenious mind, so typically puts forward. I am convinced that the proposals for Land Rover offer the best possible future, that it could have. It will have extra opportunities in the United States, and that is very much in the interests of Land Rover.

Mr. Terry Davis: What arrangements will the right hon. Gentleman make to consult those who work at British Leyland and Metro Cammell Weyman about their future before their jobs are sold off?

Mr. Channon: I do not accept the premise on which the hon. Gentleman concluded his question. As I have said, discussions are in progress. No decisions have been taken. The House will continue to be kept informed.

Mr. Richard Page: Does my right hon. Friend agree that the reality of the situation is that there is over-capacity in vehicle manufacturing in the world and that any sale will give the opportunity to broaden the narrow retail outlets, possibly to overseas markets? Will he confirm that manufacturing capacity will be part of the condition of any sale?

Mr. Channon: That is an important point, with which I agree.

Mr. D. N. Campbell-Savours: Is this not an example of the Government dropping the Union Flag and raising the Stars and Stripes once again over British industry? Is it not true that this American corporation has made it clear that it does not want the Leyland Bus division? If that is the case, what will be done with it? What is the future of the Leyland plant in my constituency?

Mr. Channon: As I told the House, separate discussions are taking place with the Laird group about the future of Leyland Bus. I should have thought that the hon. Gentleman would welcome that, rather than being so contemptuous about it.

Mr. Michael Grylls: Does my right hon. Friend remember that the Labour party bitterly opposed the privatisation of Jaguar, which has been an outstanding success, not least for all the people who work in Jaguar? Does it not prove the Luddite attitude of the Opposition, because everybody knows that the future of the motor industry lies in international co-operation? If there is a possibility of a joint venture between British Leyland and a Japanese firm, would we not welcome that as well?

Mr. Channon: My hon. Friend is entirely right, and it is typical of the Opposition today, as so often in the past, that they oppose any attempt to try to solve sensibly some of the serious commercial problems—attempts that are very much in the interest of all concerned.

Mr. Jeff Rooker: If the workers of Land Rover and Range Rover and the management said that they would prefer the Jaguar solution, would the Government stand in their way? Why did the Secretary answer yes to the question from the hon. Member for Meriden (Mr. Mills), who said that a better solution to that of the Secretary of State for the job security of the people of the Meriden constituency and others was more public investment?

Mr. Channon: I do not think that I said yes. I shall look at what 1 said, but I think that the hon. Gentleman has misunderstood. [Interruption.] How interesting it is that when the affairs of a great industry such as this are being discussed the Opposition treat them with such frivolity. They are not interested in the future of British Leyland or its Trucks division. All that they are interested in is making petty mischief, as usual.

Dame Jill Knight: Is my right hon. Friend aware that the future of scores, if not hundreds, of small businesses in the west midlands depends on their being able to provide parts to British Leyland? May we be certain that that future is being considered in any arrangement to be made?

Mr. Channon: I assure my hon. Friend that the point that she has raised is very much in my mind. I am grateful to her for referring to it again.

Mr. John Smith: On a point of order, Mr. Speaker. In view of an intervention by the hon. Member for Luton, North (Mr. Carlisle), which I fear could mislead people, I make it utterly clear that I own and drive a British car, and have never had nor driven a Japanese car.

Later—

Mr. Anthony Beaumont-Dark: On a point of order, Mr. Speaker. Bearing in mind

the importance of the BL issue, why did we have such a very short time to ask questions about it? For the entire motor industry and all the people of the midlands, nothing is more important. We waste more time in the House on trivia than we spend on important matters such as this.

Mr. Speaker: Order. I said at the beginning—the hon. Gentleman knows this well—that a private notice question is an extension of Question Time.

Mr. Beaumont-Dark: It is a disgrace.

Mr. Speaker: Order. The hon. Gentleman must not argue with me from the Floor.

Mr. John Carlisle: Further to an earlier point of order, Mr. Speaker. The right hon. and learned Member for Monklands, East (Mr. Smith) said that I had said he owned a Japanese car. To correct the record, what I said was that he visited Ellesmere Port in a Japanese car. Perhaps he would like to clarify that — [HON MEMBERS: "Withdraw"].

Mr. Speaker: Order. That is not a matter for me.

Mr. Andrew Faulds: On a point of order, Mr. Speaker. Further to the comments of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), may I stress that some of us whose constituents' work is affected by the disastrous statement that we have just had, at the first appearance at the Dispatch Box of the new Secretary of State for Trade and Industry, are entitled to have a chance to ask questions, and not have such a very brief period terminated when there were still many hon. Members on their feet?

Mr. Speaker: The House should understand that a Private notice question, which the Chair grants, is an extension of Question Time.

Mr. David Winnick: It was a statement.

Mr. Speaker: It was not a statement.

Mr. Winnick: It should have been.

Mr. Speaker: That is a different matter. It was not a statement. I was asked whether I would grant a private notice question on this matter, and I did so. I think that the House has had a fair run on it. No doubt we shall return to the matter.

Sir John Biggs-Davison: Further to that point of order, Mr. Speaker. Is it not the case that we have a very important debate to follow, which must end at 7 o'clock? Therefore, is it not right that we should pass to that debate as quickly as possible?

Mr. Speaker: The hon. Gentleman is absolutely right.

Questions to Ministers

Mr. Jack Straw: On a point of order, Mr. Speaker. Earlier, during Question Time, there was an important disclosure by the Attorney-General that both he and the Solicitor-General had been wholly kept in the dark by the Prime Minister about what she knew about the source of the leak—

Mr. Speaker: Order. As I understand it, this is an extension of the full 10 minutes that we had on this matter, during which the hon. Gentleman asked a question.

Mr. Straw: Further to that point of order, Mr. Speaker. That is my point. Is it not outrageous and ludicrous that on such an important point the Attorney-General should be subject to only 10 minutes of questions each month? Will you confirm that it is within the rules of the House for you and the Government to agree to an extension of Question Time by placing such important questions to be answered after 3.30?

Mr. Speaker: That is not a question for me. If the Government or the Minister concerned wish to answer questions at the end of Question Time, that is in order. I judge that on this occasion the Attorney-General did not do that because he had Question 49 to answer.

Protection of Military Remains Bill

Mr. Willie W. Hamilton: On a point of order, Mr. Speaker. You will recall that on Friday last the Protection of Military Remains Bill was passed unanimously by the House. All its stages were passed unanimously, which is almost unique in the House. It is dismaying to see on the Order Paper today motion No. 4 in the name of the Leader of the House:
That the Proceedings of 31st January in Committee and on Third Reading of the Protection of Military Remains Bill be null and void.
In effect, the Leader of the House is saying that a Bill, which was proposed by the hon. Member for Hampshire, East (Mr. Mates), shall be null and void despite the decision of the House that it should pass all its stages without a single vote.
We know that the Government are anxious to get away from Westland to matters of national importance, but is this not carrying things a little too far? The Leader of the House is trying to get a motion passed, presumably without debate, which rescinds the unanimous decision of the House last Friday. It shows contempt towards the House, and I invite the right hon. Gentleman to withdraw the motion and allow the Bill to proceed.

Mr. Speaker: I think that I can help the House on this matter. The Bill passed all its stages without notice. Normally, as the House knows, Bills do not pass all their stages in one sitting. I understand that the Bill in question requires a money resolution, which was not on the Order Paper. It will be necessary to move that before the Bill can proceed.

Teachers (Pay and Responsibilities)

The Secretary of State for Education and Science (Sir Keith Joseph): With permission, Mr. Speaker, I should like to make a statement on the teachers' dispute, which has caused disruption of children's education for the past year.
The House will be aware that, with assistance from ACAS, a provisional agreement has been reached between management and teachers on a settlement for 1985, an end to disruption, and assisted negotiations across pay and other conditions of service for 1986. The Government greatly welcome the prospect of a firm agreement of this kind along with the restoration of normal working in the schools. The disruption has not only damaged children's education. It has put heavy burdens on parents, head teachers and on many classroom teachers. We all want to see it end. I hope therefore that the provisional agreement will soon be formally adopted by management and teachers.
The NUT is not at present party to this agreement. I nevertheless hope that all the teachers' unions will join in the negotiations that lie ahead for 1986. The Government accept the case for an increase in teachers' pay to recruit, retain and motivate the teachers needed for the high quality school education our children need and deserve, along with improvements in the pay structure and a clarification of teachers' responsibilities. The Government have set aside additional resources for this purpose. I therefore hope that the forthcoming negotiations will soon make sufficient progress towards the Government's objectives to justify my releasing those resources.

Mr. Giles Radice: Does the right hon. Gentleman accept that he and his Department did, and have done, nothing to help bring about a settlement of this highly-damaging teachers' dispute, and that his statement today does nothing to make a long-term settlement of the teachers' grievance more likely?
Is it not the case that the right hon. Gentleman has not offered the local education authorities any extra money to help pay for the provisional settlement, nor has he offered to increase the Government's contribution towards a longer term settlement next year?
When will the right hon. Gentleman grasp the simple truth — a truth that is well understood by local authorities, parents and teachers alike — that raising educational standards and giving teachers decent salaries requires substantial extra investment?
Does the Secretary of State understand that his announcement that he will not be standing at the next election has transformed him overnight into the lamest of lame ducks? If he really cares about our children's education he should announce that he is resigning as Secretary of State.

Sir Keith Joseph: The Government have long taken the view—a view that we have every reason to confirm —that teachers deserve to have more pay in order that people of the right quality shall be recruited, retained and motivated. The Government have accepted that. We also believe that it would not be right for additional money to be given to teachers from the taxpayer without, at the same time, the teachers agreeing to a new pay structure with ample extra promotions and to implementing their duties.
The House is united in wanting an end to the disruption in our schools. There is, however, a difference between the Government and the Opposition which I must emphasise. The Government see a bargain for children in calling for extra pay and a new pay structure for teachers, but we also believe that there should be an acceptance by the teachers' unions of duties. The hon. Member for Durham, North (Mr. Radice) is active in seeking extra pay for teachers, and I can understand that. However, he completely refuses to accept that teachers, for their part, should accept duties. When he was asked that in a recent debate, he refused to confirm that it was the Opposition's view that duties are a necessary part of the bargain.

Mr. Alan Haselhurst: If there is to be a complete resolution of the dispute, does my right hon. Friend agree that it is crucial that rank and file teachers should be persuaded to accept the outline of the ACAS agreement? Is it not therefore most important that, to persuade them, the Government should make it clear what benefits are on offer in the later negotiation for 1986 onwards? Those possibilities might be enhanced before negotiation begins.

Sir Keith Joseph: I accept what my hon. Friend said. It is important that teachers in unions should well understand what is on offer and that the Government have already set aside a substantial sum of money to be released on condition that the bargain to which I have referred is made. The Assistant Masters and Mistresses Association has already called off the disruption. I welcome that, as I am sure the House does. The National Association of Schoolmasters/Union of Women Teachers is balloting its members. We understand that the ballot will take much of this month. I hope that the National Union of Teachers, which has called off the strike on which it provisionally decided, will decide to call off the disruption which it proposes at the moment to continue.

Mr. Clement Freud: The Secretary of State said that he would make sufficient progress towards the Government's objectives. Will he confirm that those objectives are the same as those that he spelt out to the House previously? Does he accept that the more intransigent he is, the more succour he gives to the hard-line unionists? I wonder whether he read today's leader in the Daily Mail which finishes:
The Cabinet should empower Sir Keith to give a kindly—and astutely kind smile — (cash to follow) before he finally bows out.
Perhaps he would like to manifest that.

Sir Keith Joseph: If we had not been firm and said that extra pay for teachers from the taxpayer would be forthcoming only if, in return, they accepted their duties, a new pay structure and extra promotions, we would not by now even have a discussion of that bargain on the agenda.

Mr. Patrick Thompson: I join my right hon. Friend in deploring the damage that has been done to our children's education by this long dispute. Does he agree that we must somehow find a way of encouraging those moderate and conscientious teachers who intensely dislike the strike weapon and who, in many cases, have rejected it? Can we not in the longer term move towards some kind of professional teachers' council, and hope that we can move towards negotiating a no-strike agreement?

Sir Keith Joseph: I agree with my hon. Friend and pay tribute to all those teachers, in particular head teachers, who have carried on without disruption. I am ready to support the idea of a general teachers' council, if that is the wish of the majority of teachers, but I should need first to be convinced that it would operate on behalf of the children as well as taking an interest in teachers.

Mr. Jack Thompson: In his statement, the Secretary of State used the words, "normal work in schools". Do I take it that he was referring to the time before the teachers' dispute arose when teachers performed many out-of-school activities including taking children for Saturday morning football matches and that type of thing? The feeling that I receive in my constituency and beyond is that in the foreseeable future—certainly not in the Secretary of State's lifetime—teachers will not go back to normal working in schools. Even if there is a settlement, normal working in schools, as we recognised it before the dispute, will not return. Teachers are resisting the demands for out-of-school activities made upon them.

Sir Keith Joseph: The answer to the hon. Gentleman is yes, except that the Government are now separately financing midday supervision, as he and the House are aware, and we are asking that that appraisal be considered as part of the duties.

Mr. Robert Key: Is my right hon. Friend aware that the majority of teacher unions such as the AMMA and the NAS/UWT are prepared to talk about restructuring, conditions and appraisal, whereas the impression is given that they are not? Does he agree that the ACAS panel, which has been established, should become a son of Burnham — an embryo negotiating body?

Sir Keith Joseph: I welcome what I know is the correct attitude of a number of unions. Burnham is needed under the law to validate and implement any agreement made under the ACAS umbrella.

Mr. Nigel Spearing: Is the Secretary of State aware that education requires a degree of consent and confidence before any learning can take place? Was it not his responsibility and duty to separate the issues that he mentioned earlier so that there was not the disruption that has taken place, and to ensure that discussion went forward on two different levels to avoid the disaster that we have just experienced?

Sir Keith Joseph: I agree with the hon. Gentleman's first proposition, but I do not think that the blame for the teacher unions' reluctance to discuss pay and what pay is for falls upon the Government.

Mr. Harry Greenway: Does my right hon. Friend accept that everyone is pleased to see teachers paid more? Does he accept that, unfortunately, the strike that we have seen over the past year has been the tip of the iceberg and that there has been serious disruption in schools for the past three years, with books not marked, work not prepared, parent-teacher evenings and evening interviews with parents not held? Will he do all that he can to ensure that the forthcoming discussions under the ACAS umbrella will ensure a full return to proper duty by all teachers so that children once more have the proper education that they deserve?

Sir Keith Joseph: Yes, Sir. It is to avoid a repetition of the experience of the past three years that the Government attach such importance to the acceptance by the teacher unions of their duties in return for additional pay and a revised pay structure.

Mr. Peter Hardy: Does the Secretary of State recall an earlier reference to moderate and conscientious teachers? Does he recognise that even the most moderate and conscientious teacher perceives that the damage which has been done to British education during the past year or two is greater than anything it has ever experienced? Is he aware that that damage will not be relieved, if he was accurately reported following the settlement by the suggestion that the Government would not find the money to pay for any improvements? Will he make it absolutely clear that the Government will find the money or local authorities, whether they be Labour or Conservative-controlled, will all be found to be in default by the Secretary of State for the Environment?

Sir Keith Joseph: Such an inaccurate quotation is beneath the hon. Gentleman's normal standing. I never said any such thing. I repeated what the local education authorities have said the whole time, that to honour the agreement that they have now made would strain their resources a great deal.

Mr. Peter Bruinvels: My right hon. Friend is to be congratulated on making it clear that the Government are ready to negotiate on the excellent ideas produced by ACAS. Will he make it his prime duty to publicise the fact that from 1 April 1986 a new teacher will get at least £7,037 and that a teacher on the top of graduate entrant scale 3 will get £11,969? Is that not a commitment to the teaching profession, and does it not show that the Government put the children first?

Sir Keith Joseph: I agree with much that my hon. Friend said. To confirm the attitude that I am seeking to express, I should like to quote one sentence from a letter that I wrote to the chairman of the employers' panel and released to the press:
the Government is only too eager to be able to justify such extra spending on teachers' pay and better rewards for effective teaching, in return for an acceptable bargain with the teachers on pay structure and on duties.

Mr. Dennis Skinner: Have not the Government a cheek to be telling the teachers that they cannot have proper pay deals when the same Government voted through 19 per cent. for top salaries and in 1985 nodded through an average 17 per cent. wage increase for those in business management and top executives? The same Government keep referring to co-operation with regard to the teachers, but they refuse to co-operate with House Committees and instead plead the fifth amendment. They have ex-Ministers who will not tell the truth, and yet they are asking—

Mr. Speaker: Order. This has nothing to do with the statement.

Sir Keith Joseph: It is on the same perception of the need to recruit, retain and motivate people of the right quality that the Government agreed with the recommendations of the Top Salaries Review Body and they have made available to teachers an extra £1·25 billion in return for them doing their duties.

Mr. Speaker: May I remind the House, as the hon. Member for Epping Forest (Sir J. Biggs-Davison) has done, that we have an important debate following this statement, and 1 also have notice of two Standing Order No. 10 applications. I shall allow questions to continue for a further five minutes and I hope I shall be able to call most of the hon. Members who are now standing if they ask brief questions.

Mr. Michael Latham: Is my right hon. Friend aware that those of us who have advocated a review body and who still believe in one nevertheless believe that an honourable settlement has been negotiated by ACAS? It will not be understood by parents if disruption does not cease forthwith.

Sir Keith Joseph: I agree very much.

Sir Kenneth Lewis: Is my right hon. Friend aware that I shall not consider myself a lame duck for the rest of this Parliament and therefore I see no reason why he should? If this settlement is decided by Burnham and most of the teachers' unions therefore accept it—it would presumably be imposed after that—is there any reason why members of other teachers' unions should not withdraw their support for the NUT, which will be the only body opposing it? After the new Burnham decision the NUT could not justify opposing the agreement.

Sir Keith Joseph: I very much hope that the NUT executive and its members will change their attitude.

Mr. Peter Lilley (St. Albans): Does my right hon. Friend agree that this agreement could have been reached last year when he first offered an extra £1·25 billion if at that stage the NUT had not still had a majority on the Burnham committee? It is only because the NUT lost that majority that this progress has become possible. They lost that majority because teachers voted with their feet for a more moderate approach to the settlement and to take up the olive branch which my right hon. Friend had offered.

Sir Keith Joseph: It might have been possible to provide extra money from the taxpayer had there been a with-strings agreement for 1985–86 instead of a no-strings agreement. That prospect was wrecked when the NUT walked out of the negotiations in December 1984.

Mr. Nicholas Lyell: I welcome the settlement so far, but will my right hon. Friend constantly re-emphasise the importance of restructuring to any longterm solution to the teaching profession's pay and conditions problem? Will my right hon. Friend confirm that the Government are willing to fund the increased costs of such restructuring, and will he recognise the difficulties of the local education authorities in the interim of funding a proper settlement?

Sir Keith Joseph: I agree about the importance of restructuring. The Government had provided, on condition, the extra money which would have enabled substantial restructuring and no fewer than 74,000 extra promotions, had the offer put forward by the employers in September last year, on the basis of the Government's extra money from the taxpayer, been accepted and not rejected.

Mr. Alan Howarth: Is my right hon. Friend aware that the concluding remarks of the hon. Member for Durham, North (Mr. Radice) are regarded by Conservative Members as deplorable? There is great respect on this side of the House and in the country for what my right hon. Friend has set out to do as Secretary of State. Is my right hon. Friend aware that there is widespread support in Britain for his insistence that the Government will not underwrite a new pay settlement to teachers until such time as their unions are willing to accept a proper professional contract which includes forswearing the disruption of schools now and in the future?

Sir Keith Joseph: I am grateful to my hon. Friend and agree with him. I am genuinely surprised that the hon. Member for Durham, North allows himself to reject the idea of the duties of teachers as part of the bargain.

Mr. Richard Hickmet: Will my right hon. Friend accept that his term of office has been characterised by a genuine desire to improve standards in our schools? Does my right hon. Friend not agree that in the light of the ACAS proposals the time has come to stop disruption in our schools especially in marginal constituencies such as mine—[Interruption.] The NUT quite deliberately targeted marginal seats. Is this not a generous offer and is it not time that it was accepted?

Sir Keith Joseph: I am rather shocked that Opposition Members laugh so heartily at the penalisation of children in the schools. Surely it is not part of the philosophy of the traditional Labour party to take it out on children?

Mr. Frank Haynes: Is the Secretary of State aware that, like many other hon. Members in their constituencies, I have had numerous letters from parents in mine? They do not think a great deal of the Secretary of State for Education. Is he also aware that not long ago I accused him of messing up social services and messing up industry. Now he has messed up education. I am pleased that he is going at the end of this Parliament, and I hope he will not interfere in the future with the education services.

Sir Keith Joseph: I feel, despite the hon. Gentleman's point of view, that most people in this House desperately want better education for our children. That calls for the acceptance by teachers of their duties as well as a review of the career structure.

Draft Single European Act

Mr. Tony Marlow: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the Draft Single European Act final text.
I emphasise "final text".
On 18 December, when my hon. Friend the Member for Southend, East (Mr. Taylor) was discussing the European treaty with my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs, the Secretary of State said:
It was agreed that we should not speak of the establishment of a European union."—[Official Report, 18 December 1985; Vol. 89, c. 302.]
The first paragraph of the preamble to this treaty gives a commitment
to transform relations as a whole among their States into a European Union,… to implement this European Union … and to invest this union with the necessary means of action".
In 1973 we joined the Common Market. At a later stage we had a referendum to sustain membership of the Common Market. The British people have never been asked whether they wish to be dragged unknowingly, unconsulted and unconsenting into a United States of Europe. This text is final and would mean that the United Kingdom would cease to be a sovereign state and would be merely a province of a larger United States of Europe. It is an important issue.
Secondly, as in important issue, it states in this final text that we are
convinced that the European idea … and the need for new developments correspond to the wishes of the democratic peoples of Europe, for whom the European Parliament, elected by universal sufferage, is an indispensable means of expression,
This is bunk. If, Mr. Speaker, you speak to your constituents, or if I speak to mine, or if one looks at the figures of those who voted for this institution at the last election, there is no doubt that it is bunk. It is not only bunk, because if one looks at article 6 one sees that this dangerous institution is about to be given yet more power.
Throughout the treaty we have talked about the European Assembly. Now, in article 6, we read that "After consulting the Assembly" is to be changed to "in cooperation with the European Parliament". I am not sure

what the language means, but I think that a Parliament is different from an assembly, and that co-operation is different from consultation. In this treaty this institution is to be given a great deal of power. As political power and parliamentary power is by and large a zero sum, if more power goes to Strasbourg and Brussels there will be less power here in this Parliament.
This is a matter of such fundamental importance that there is a risk that as a result of this Denmark will feel forced to secede from the European Community. It is urgent because the next business of the House is to consider giving parliamentary approval to an illegal budget passed by the European Assembly. It seems to me that it is the wrong way round for the Government to wish to give money to this bandit institution. Surely we should first discuss in Parliament whether we wish to give more powers to this institution.
As a matter of great urgency the Government have said that they must provide the extra money because they are taking the case to the European Court of Justice. The European Court of Justice is not only about justice; it is also about the increase of power of European institutions. If the Government first provide more money through Parliament and then say that they want the institution to have more power, and Parliament does not even see fit to discuss that increase in power, what is the outcome likely to be at the European Court?
You are a wise and powerful Speaker, Mr. Speaker. You are here, not to support the Government or their programme, but to support the sovereignty of the House. I implore you to grant leave for this urgent debate to take place.

Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he believes should have urgent consideration, namely,
the Draft Single European Act final text.
I have listened with great care to what the hon. Member has said. As he knows, my sole duty when considering an application under Standing Order No. 10 is to decide whether it should be given priority over the business already set down for this evening or for tomorrow. I regret that I cannot find that this matter meets all of the criteria laid down in the Standing Order, and I cannot, therefore, submit his application to the House, but he will of course have an opportunity to discuss it later today.

Police Federation of Northern Ireland

Sir Eldon Griffiths: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the restriction on the right of free speech imposed on the Police Federation of Northern Ireland.
The matter is specific, in that the Chief Constable of Northern Ireland has tried to gag the elected chairman of the Police Federation of Northern Ireland by issuing a force order cancelling regulation 35 of the Royal Ulster Constabulary discipline code.
Regulation 35 reads:
Nothing in these regulations will preclude the spokesman of any of the constituent sections of the Police association for Northern Ireland making or issuing any statement to the news media concerning the welfare and efficiency of their members.
Last week, the assistant chief constable, acting on the Chief Constable's instruction, handed to the chairman of the Police Federation a paper, of which I have a copy, saying that regulation 35, which establishes beyond peradventure the right of the federation to speak out on any matter which the House has made its business, had been amended thus:
Statements and interviews and the publication of articles in any journal or periodical concerning matters of general Force policy and actions, or expressions of opinion on police problems or duties are not permitted without the express consent and approval of the Chief Constable … Where any aspect of welfare or efficiency may relate to Force policy or actions, police problems or duties, the Chief Constable shall be consulted and approval obtained, before any statement is made or any article published.
Those words have no meaning other than that the Chief Constable of Northern Ireland intended, and intends to prevent the federation from making any comment in public which he has not specifically approved in advance. This is not only censorship. It is, and is meant to be, a gag.
During the weekend, the Chief Constable went further. He withdrew the amendment that I have just quoted and substituted for it his force order cancelling regulation 35 —the federation's free speech regulation—

Mr. Speaker: Order. The hon. Gentleman must not use arguments which he might use if the application were granted.

Sir Eldon Griffiths: I am obliged, Mr. Speaker. I merely wanted to say that the matter is specific because the force order contains the words:
Regulation 35 is cancelled".
The matter is also urgent because, if the Chief Constable's force order is allowed to stand, not only is free speech denied, but when the chairman of the Police Federation meets the press on Wednesday or Thursday his superior officer will have no choice but to charge him with a disciplinary offence. That is why it is urgent for his matter to be dealt with.
The matter is important, too, for the Chief Constable's action in Ulster could pose a threat to the free speech of the Police Federations of England and Wales and of Scotland as well as that of Northern Ireland. The federations on this side of the water will go to the aid of their Northern Ireland colleagues if this oppressive order is not withdrawn.
I therefore invite you, Mr. Speaker, to allow the House to debate this matter as it touches on one of our most fundamental rights—that of free speech—and strikes at the heart of the morale of 8,000 brave men and women who make up the Police Federation of Northern Ireland.
The matter is specific, urgent and important. I beg to ask that leave be given for it to take precedence over other business.

Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he believes should have urgent consideration, namely,
the restriction on the right of free speech imposed on the Police Federation of Northern Ireland.
The hon. Gentleman has raised a very important matter and I have listened with great care to what he has said. However, I have to give him the same answer as I gave to the hon. Member for Northampton, North (Mr. Marlow). I regret that I cannot find that the matter that he has raised meets all of the criteria laid down in the Standing Order, and I cannot, therefore, submit his application to the House. No doubt he will be able to find other ways in which to bring the matter before the House.

Supplementary Estimates

Class II, Vote 9

European Community Budget

[Relevant documents: The Draft General Budget of the European Communities for the Financial Year 1986, with amendments and proposed modifications (Documents Nos. 10773/85 to 10778/85), together with the Treasury's Explanatory Memorandum thereon; and the Seventh Report of the Select Committee on European Legislation, House of Commons Paper (1985–86) No. 21-vii, paragraph 9.

Minutes of Evidence taken before the Treasury and Civil Service Committee on 30 January 1986, House of Commons Paper No. 203-i.]

The Minister of State, Treasury (Mr. Peter Brooke): I beg to move,
That a supplementary sum, not exceeding £135,917,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31 March 1986 for expenditure by the Treasury in connection with payments to the Budget of the European Communities not covered by direct charges on the Consolidated Fund under section 2(3) of the European Communities Act 1972, as set out in House of Commons Paper No. 177.
The special Supplementary Estimate which is before the House today relates to our contributions to the 1985 and 1986 budgets of the European Communities. There are two relevant documents, apart from the Estimate, of which Members will wish to be aware — a memorandum submitted by the Treasury to the Treasury and Civil Service Select Committee on 24 January, and a transcript of oral evidence taken by the Committee on 30 January.
I hope that it will be helpful to hon. Members if I first remind the House of the purpose and content of the Special Supplentary Estimate. I propose then to discuss the Government's policy on the disputed 1986 Community budget and our contributions towards it, and finally to say something about the statutory basis for our contribution to the disputed budget and the procedures for obtaining parliamentary approval.
The Estimate contains two elements. The larger concerns the provision of some £118 million towards meeting a Commission request to member states to bring forward a payment of traditional own resources —agricultural levies and customs duties—from December to November 1985. I should stress that this sum does not represent an increase in Community spending. It is purely a question of the timing of the payment of own resources collected during October 1985. They would normally have been paid to the Commission in December, but instead they were paid on 20 November. Our December payment was reduced by a corresponding amount and there was therefore no effect on the public expenditure planning totals.
The need for the November advance arose because one element in the financing of the 1985 budget —supplementary contributions under the 1985 intergovernmental agreement—was not received before the very end of 1985. We had taken provision of £820 million in Main Estimates and Summer Supplementaries to cover

these advances during 1985, but had not expected them to continue to be required as late as November. Consequently, when the Commission asked member states to bring forward the £134 million December contribution into November, only £16·1 million could be covered by the amount remaining in the Vote. The balance of £118 million was paid by means of a drawing on the Contingencies Fund. Parliament was duly informed of the advance payment on 21 November. The Supplementary Estimate now proposed is needed to reimburse the Contingencies Fund before the end of the current financial year. The Commission's cash flow difficulties caused by late payment of the 1985 IGA have now been resolved. There should therefore be no need for further advance payments of traditional own resources in the immediate future.
The second part of the Estimate relates to the disputed 1986 budget. It seeks provision of £18 million in respect of our contributions during the first quarter of the year towards that part of the budget added by the European Parliament in excess of its powers under the treaties.
As hon. Members will recall, the European Parliament adopted in December a budget for 1986 which made provision for some 629 million ecu—about £400 million —of spending above that agreed by the Council. The Government have decided to join the Council and several other member states in asking the European Court to annul the disputed elements in the budget. In the meantime, the Government propose, in common with all other member states, to pay in full to the budget on a without prejudice basis. Since, however, we do not accept any legal obligation to contribute towards the disputed elements, this element in our contribution cannot be charged direct to the Consolidated Fund under the European Communities Act 1972 and we need instead to seek Parliament's authority through the Estimates procedure.

Mr. Tony Marlow: Can my hon. Friend say how much money Denmark is having to pay and when it is arranging to pay it? Can he also tell the House how it is that the Commission is applying this illegal budget at this stage?

Mr. Brooke: Denmark is necessarily paying a smaller amount than we are, but it has decided to pay in full. In a moment I shall discuss the Commission's action in bringing forward the budget and asking for payment.

Mr. Eric Deakins: What provision exists under EEC legislation, laws and treaties for those amounts to be repaid if we win our court case?

Mr. Brooke: The circumstances that will obtain when the court gives judgment on the case are a matter which I shall discuss later. It is perfectly proper that the hon. Gentleman should raise it.
I shall discuss now the Government's policy on the disputed budget for 1986. The Government take an extremely serious view of what has happened during the 1986 budget process. The two main issues are budget discipline and treaty violation.

Mr. Eric S. Heffer: The hon. Gentleman must be aware of the fact that today in London 48 Liverpool Labour councillors are facing the courts because of a so-called illegal budget. If the decision goes against them—

Mr. Deputy Speaker (Sir Paul Dean): Order. I believe that the hon. Member is referring to a matter that is sub judice. Can he assure me that it is not sub judice?

Mr. Heifer: I am making an analogy, Mr. Deputy Speaker. If they are found guilty—I am not arguing for or against them — they will be surcharged and disqualified. If the Government win the case, will they not only ask for the money back, but suggest that the MEPs who have raised the budget should be surcharged and disqualified from holding office?

Mr. Deputy Speaker: It would not be appropriate for the Minister to pursue that matter. In the House, it is not in order to refer to a case that is sub judice. I am informed that the case is sub judice.

Mr. Heffer: On a point of order, Mr. Deputy Speaker. I am not referring to the case. I am merely pointing out that the councillors are now before the courts. I am not saying whether they are right or wrong. I am not arguing their case.

Mr. Deputy Speaker: Order. I said that it was not in order to refer to a case that was sub judice. This case is sub judice and must not be referred to.

Several hon. Members: rose—

Mr. Heffer: Further to the point of order, Mr. Deputy Speaker. If it is wrong for me to refer to the Liverpool case, is it not wrong for the Government to argue about something that is also sub judice, because it is before the courts?

Mr. Deputy Speaker: The hon. Member is confusing two matters.

Mr. Heifer: I am not confusing anything—

Mr. Deputy Speaker: Order. The House will like to know that the sub judice rule applies to United Kingdom courts, not to European courts.

Mr. Dennis Skinner: Further to the point of order, Mr. Deputy Speaker. You have said that the case is before the European courts and cannot be subjected to the same sub judice rule as applies to a British court. When we went into the Common Market—dragged in without a vote, and some of us have been protesting ever since —we were told, without reservation, that in those areas where United Kingdom laws conflicted with European laws, the Common Market laws would supersede our laws. The Minister is telling us that the case is before the courts, which means that it is sub judice. We know that we cannot talk about Liverpool and Lambeth because you, Mr. Deputy Speaker, have said that those cases are sub judice. On that count, it seems to me that the whole debate and the application for a Supplementary Estimate must be abandoned, because we are not allowed to talk about it.

Mr. Deputy Speaker: The hon. Member is raising a point that can legitimately be raised during the debate. I am explaining the sub judice rule which applies in this place. It applies to United Kingdom courts, not to European courts. If the House wishes to change the rule, it knows how to attempt to change it. I am stating only the present position. It is my job in the Chair to ensure that our rules are upheld.

Mr. Anthony Beaumont-Dark: Further to the point of order, Mr. Deputy Speaker.

The House is being asked to pass an illegal Act. The Government—thank God—with the other Governments, are to fight it through the Euro-court. If the Euro-court finds against us we can be forced to pay money. and the European Parliament will thus override the sovereignty of the House. How can that not be sub judice? How can we pay money—

Mr. Deputy Speaker: Order. The hon. Member is raising points which it would be perfectly legitimate to raise in the debate. I remind the House that the debate must finish at 7 o'clock. There are many hon. Members who wish to speak.

Mr. Nicholas Budgen: Further to the point of order, Mr. Deputy Speaker. I wonder whether you would explain the sub judice rule further to the House, because there is a distinction between drawing attention to the fact that proceedings are taking place and commenting upon the substance of those proceedings. The hon. Member for Liverpool, Walton (Mr. Heffer) was merely pointing out that proceedings were under way. He was not offering an opinion on whether they were justified, but was simply saying that proceedings are taking place. The purpose of the sub judice rule is to prevent legal proceedings from being affected by what might be said in the House. The hon. Gentleman was not offering a comment on the legal proceedings. He was drawing an analogy, and to draw the analogy he pointed out their existence.

Mr. Deputy Speaker: One of the reasons for the sub judice rule is to ensure that cases are not prejudiced by anything that is said in the House. Drawing them into an argument could easily prejudice a case. That is why the House, in its wisdom, has had the rule for a great many years.

Mr. Hugh Dykes: On a point of order, Mr. Deputy Speaker. I apologise for coming in—[HON. MEMBERS: "No."]—on the point of order. I apologise also to my hon. Friend the Minister. Surely, Mr. Deputy Speaker, your ruling is bound to be right, because the case to which the hon. Member for Liverpool, Walton (Mr. Heffer) referred is a domestic case involving individuals. By implication, in raising that matter the hon. Gentleman is perhaps a little sympathetic towards those individuals. My hon. Friend the Minister is referring to an international case, where the debate technically revolves around the payment of a supplementary additional amount, rather than around the underlying arguments, although they will form part of the debate.

Mr. Deputy Speaker: I am grateful to the hon. Member for his comments. I hope that we can now continue with the debate.

Mr. Brooke: The two main issues are budget discipline and treaty violation.
On budget discipline, the Government first expressed their concern at the Council's "Second Reading" discussion on 26 and 27 November. On that occasion the Council voted by qualified majority to increase non-obligatory expenditure by some 1·2 billion ecu on payment appropriations. In the Government's view, it would have been compatible with the spirit of the budget discipline agreement to increase non-obligatory expenditure by some 1 billion ecu, comprising 440 million ecu permitted under the statutory maximum rate of increase for this expenditure


plus some 550 million to 600 million ecu earmarked for Spain and Portugal in the first year of the enlarged Community. The 1·2 billion ecu voted by the Council somewhat exceeded this figure. The United Kingdom therefore voted against the Council's "Second Reading" budget as representing a threat to budget discipline. We did not, however, regard it as a flagrant violation. The non-obligatory expenditure totals exceeded budget discipline levels, strictly interpreted, but the excess was more than offset by the new own resources — net of refunds—which Spain and Portugal will be bringing to the budget.

Mr. David Heathcoat-Amory: When we agreed to increase the level of our VAT contribution to the Community, it was pledged in return that we would get budget discipline. Is my hon. Friend saying that even if we win the case against the European Assembly the Council's "Second Reading" budget will still be in breach of those undertakings?

Mr. Brooke: I repeat that the non-obligatory expenditure totals exceeded budget discipline levels, strictly interpreted, but the excess was more than offset by the new own resources—net of refunds—which Spain and Portugal will be bringing to the budget.
At the December Budget Council the Council decided, with the United Kingdom again voting against, to offer a further 242 million ecu of non-obligatory expenditure in an attempt to reach agreement with the Parliament. The Parliament rejected the offer, which the President of the Council then withdrew, and took instead the regrettable step of voting and then adopting a budget providing for non-obligatory expenditure at a level 629 million ecu above the Council's "Second Reading".
The budget as adopted by the Parliament is clearly incompatible with the Council's budget discipline conclusions on non-obligatory expenditure. It does not follow that budget discipline as a whole lies in ruins. The single most important element in the budget discipline agreement is the guideline for expenditure on agricultural market support, and the budget as proposed by the Council and adopted by the Parliament respects that guideline. There is headroom of some 170 million ecu within it. The problem area is non-obligatory expenditure. That is where the Parliament's action, and to a lesser extent the Council's December offer, were manifestly incompatible with the budget discipline agreement.
The breach of budget discipline is a serious matter. To be fair, however, the Parliament has never subscribed to the Council's conclusions on budget discipline and is not legally bound by them. What is even more serious, therefore, is that the Parliament exceeded its powers by adopting a budget for 1986 with levels of non-obligatory expenditure going well beyond what was available under the treaty. The treaty provides that, if the statutory maximum rate of increase in non-obligatory expenditure is to be exceeded by more than the Parliament's statutory margin of manoeuvre, the Council and the Parliament must agree on a new maximum rate. In the event, the Parliament unilaterally adopted a budget which included a level of non-obligatory expenditure for which the Council's agreement had been neither sought nor obtained.
In the Government's view, the Parliament cannot be allowed to get away with this. If it were, there would, as

my right hon. Friend the Member for Worthing (Mr. Higgins) has put it, be a substantial shift of real power in the Community. The balance of budgetary power between the Council and the Parliament would shift markedly in the Parliament's favour. The Parliament would be able to add substantial sums with impunity each year to the Council's proposals. These implications for future control of the Community's expenditure are even more serious than the amount of some 629 million ecu which is immediately at issue in the current year.
The Government have acted swiftly in response to the Parliament's action. We have taken three steps. First, we urged the Council to bring a case against the Parliament before the European Court under article 173 of the EEC treaty. This the Council agreed to do, by a seven to three majority, on 20 December — a bare day after confirmation of the decision by the President of the Parliament to adopt the budget. The Council's legal services are expected to deposit pleadings with the European Court in the middle of this month.
Secondly, we have ourselves initiated a case against the Parliament before the European Court, alongside the Council's case. Our application to the court was completed on 28 January and deposited on 29 January. The pleadings cannot be published, but have been made available to the Select Committee on the Treasury and Civil Service. Copies have also been placed in the Library of the House for Members' use.
The Government's decision to bring separate national proceedings alongside the council's case was influenced by three main considerations: first, the need to insure againt the slight risk that the Council's case might be found inadmissible because of the wording of the relevant treaty provisions; secondly, the need to insure against the risk that the majority in the Council in favour of the court action might at some stage be lost; and, thirdly, our ability to deploy in our own case legal arguments which we believe to be most compelling. Four other member states are likewise bringing national cases—France, Germany, Luxembourg and the Netherlands.
The substance of our case is that the Parliament acted unlawfully by adopting payment and commitment appropriations which failed to respect the maximum rate provisions of the treaty, and also by including unauthorised appropriations for certain items of obligatory expenditure over which the Council has the last word. We are asking the court accordingly to annul the 1986 budget as adopted in so far as it exceeds the Council's own "Second Reading" budget of 26 and 27 November.

Mr. Teddy Taylor: My point concerns the action taken by the British Government, quite apart from the actions initiated by the Council and by other member states on the use of this money. Is there not a danger that the Commission will have spent the £18 million in this Supplementary Estimate before our interim measure comes before the court? Would not the best way of preventing the Commission from spending the money be for us not to pay the money? How will the Commission pay the money back if it has already spent it?

Mr. Brooke: My hon. Friend has put his finger on the point. We have announced that we will take that interim measure before the court. We are bringing the interim measure before the court for a number of reasons which are not simply associated with the immediate payments.


We are concerned to place the application before the European Court. This is a novel action in the Community's history. We are concerned that the case should be considered at the earliest possibility. As I said to the Select Committee on the Treasury and Civil Service, if the Commission has spent the money when the court makes its decision on the final case, by definition, the money has been spent. However, a most important battle will have been won in terms of establishing the distribution of power between the Parliament and the Council. If, on any future occasion, Parliament sought to do the same thing, an interim application would immediately become admissible and be decided on the precedent of the previous case.

Mr. Marlow: Can my hon. Friend estimate how long the legal proceedings will take? How much money above the legal budget which my hon. Friend would support is likely to be spent in that time? If it is within the same financial year, why on earth can we not have the money back from the Commission?

Mr. Brooke: On the timing of the main court action, it is unlikely that we will obtain a judgment much before the end of the year, and it could be some time well into the next calendar year. On my hon. Friend's specific question, by definition the sum involved will be £72 million, contingent upon the relative exchange rate at the time.

Several hon. Members rose—

Mr. Brooke: I am anxious that hon. Members should have an opportunity to speak in the debate.

Mr. Nigel Spearing: This is an important point, especially in view of the possible year's gap. Is the Minister saying that the Commission, its President or an official statement has suggested that despite the matter being sub judice—at least in EEC terms—the Commission will nevertheless go ahead and pay out the money before the court makes a decision? Who made that statement, and on what authority?

Mr. Brooke: The Commission has presented its demand to the United Kingdom for payment, and that is the subject of today's debate. It is on that ground that we intend to move our interim application that the demand is inappropriate in terms of the margin. Once the demand payment is paid, the resources can be spent under the Commission's powers. Failing our first request to the court, we are asking it to annul the budget in its entirety; in other words, to find that no valid budget exists.
Our third action is to ask the court for an interim order in effect suspending implementation of the illegal elements in the budget until the court has given judgment. We shall be applying for this order within the next week or so. Our application will ask the court to suspend implementation both of the excesses of expenditure in the budget above the Council's "Second Reading" levels and of the extra contributions required to finance these excesses. Our advice is that the court is unlikely to reach judgment on the substantive cases before the end of this year, or quite possibly later. In our view, this reinforces the case for requesting an interim order, on which we would expect the court to decide within a few weeks. Other member states are likewise considering whether to request interim orders, but we are the only country to have decided firmly to do so.
The other policy issue which the Government have had to address is how much the United Kingdom should pay towards the disputed budget in the meantime, pending rulings by the European Court. The Government have decided, after careful consideration, that the best course is to pay in full towards the budget as adopted, on a without prejudice basis, pending the court's rulings. That is why we decided to present the special Supplementary Estimate.

Sir Nicholas Bonsor: I am trying to follow the logic behind my hon. Friend's argument. I simply cannot understand how we can pay money on a without prejudice basis, which will then be spent and become unrecoverable. I cannot understand why my hon. Friend cannot defer that payment until the interim decision of the court.

Mr. Brooke: If my hon, Friend will be patient, I shall come to that part of the argument.

Sir John Biggs-Davison: In the event of the Commission spending the money illegally, will it be open to us to deduct that amount from a future budget payment?

Mr. Brooke: There would be freedom for us to deduct that amount from a subsequent contribution. However, obviously that would be contingent upon the decision of the court in responding to our interim application.
The first and most important consideration is that the Council and individual member states must win the court cases if a major shift in power towards the European Parliament is to be avoided. The Government's legal advice has been that payment in full would enable the United Kingdom to appear before the European Court in the best possible posture. On the other hand, failure to pay in full would impair the United Kingdom's posture and tend to prejudice the substantive cases brought before the court and, still more, the United Kingdom's application for an interim order.
A second important consideration is that all other member states have decided to pay in full. We ought not lightly to break ranks with the rest of the Council.
A third consideration is that the United Kingdom would incur a potential liability to penal interest charges—

Mr. Budgen: When my hon. Friend gave evidence before the Treasury and Civil Service Select Committee last week he said that the sole reason for paying the money was that the legal advice to the Government was that they should do so. He said that he would make available further details of that legal advice. When it was suggested that the payment was being made because the Government wished to appear Communautaire, my hon. Friend returned to the argument that it was being done on legal advice. Will he please explain in detail the basis of the legal advice?

Mr. Brooke: I repeat what I said a moment ago, that failure to pay in full would prejudice the United Kingdom's posture, and still more the United Kingdom's application for an interim order — [SEVERAL HON. MEMBERS: "How?"] Because there would be a degree of illogicality in asking the Commission to cease to insist on a payment from us if we were not in fact making that payment.

Mr. Marlow: On a point of order, Mr. Deputy Speaker. As the whole of this case seems to hang on legal advice, is there any way in which the House, before it


decides on the matter at 7 o'clock, can have the benefit of the presence of the Attorney-General so that we can ask him questions?

Mr. Deputy Speaker: That is a matter of argument, and is not a matter for me.

Mr. Brooke: As I was saying, a third consideration was that the United Kingdom would incur a potential liability to penal interest charges on delayed payments if we failed to pay in full. The penal rate is currently nearly 21 per cent., and rises with each month of delay.
It may be helpful to my hon. Friends if I expand a little on the legal background. Although the Government have been advised that they are not legally obliged to contribute to the disputed part of the 1986 budget, there is a contrary view — which we understand to be held by the Commission, among others—that the budget must be treated as valid unless and until it is annulled by the court. If the Government refused to contribute to the adopted budget in full, they would almost certainly be challenged by the Commission. Indeed, it is possible that the Commission could ask for an interim order against the United Kingdom. If, at the end of the day, it was held that the United Kingdom should have contributed to the budget in full at this stage, any delayed payments would be subject to the penal interest charges that I mentioned.
Several members of the Treasury and Civil Service Committee argued last week that, contrary to the argument which I have given, payment in full would tend to prejudice the case rather than failure to pay in full. The Government do not accept that view. In our view, the only sensible way to proceed in such cases is to be guided by the judgment of those who are expert in the areas concerned, and our advice has been that it is failure to pay in full that would tend to prejudice our cases, and in particular our request for an interim order.
There are three particular points. First, our advice is that the court is likely to be more impressed if the Council and member states adopt a common approach than if different member states pursue different courses. The dispute is effectively between the Community's institutions. The more an institution shows itself divided, the weaker its position will be. We have therefore been concerned to co-ordinate our approach with other member states and the Council. Although we shall wish, where appropriate, to bring additional arguments to the attention of the court, we do not want to fragment the Council's position or divert the court's attention from the main area of dispute. As I mentioned before, all other member states will be contributing in full.
Secondly, the court may be expected to have some regard to the reasonableness of the conduct of the parties before it. Our advice is that our case will not be helped, least of all our application for an interim order, if we act in a way which appears to pre-empt the very judgment that we are asking the court to make. It is worth bearing in mind that our application for an interim order in the present circumstances will, from the Community's point of view, be novel and controversial.

Mr. Eric Forth: rose—

Mr. Brooke: I shall not give way. I have given way at least 10 times already.
Thirdly, our advice is that there is advantage in being plaintiff rather than defendant throughout the nexus of cases surrounding the disputed budget. Our posture will be strengthened by standing on the high ground rather than being on the defensive. If we did not pay in full, we should almost certainly find ourselves on the defensive. The Commission would almost certainly sue us for the amounts not paid and for penal interest charges on these amounts. It takes the view that member states have an obligation to pay in full towards an adopted budget unless and until the court has ordered otherwise. We would then be defendants in one of the nexus of court cases and our posture would consequently be impaired.
To sum up, the important thing in the Government's view is to win the court cases, or the European Parliament will gain substantial power at the expense of national Governments and Parliaments. I freely acknowledge how tempting it is not to pay in full in the meantime. However, in the Government's view it would be quite misguided to act in ways which, on the best available legal advice, would tend to prejudice the court cases.
I turn to the parliamentary and payments procedures. The Select Committee on the Treasury and Civil Service questioned me at some length on these issues last week, and I want to say at once how much I respect and share its wish to protect the rights of this House in matters of Supply.
Before coming to the substance, I want to stress that the procedures that we are now adopting — the Supplementary Estimate and the debate in the House today —are those suggested by the Committee's predecessor in the last Parliament in 1982. The Government have complied with its suggestion and that is why the House has the opportunity today to debate the issues fully before any payment is made towards the disputed part of the budget.

Mr. Forth: rose—

Mr. Brooke: On substance, I should like, first, to say something about how payments will be made and financed. The due date for our first VAT payment towards the 1986 budget as adopted by the Parliament is today — January's payment is based by convention on the draft budget—and the Commission will seek to charge penal interest in the event of any delay. The Government therefore intend, if the House approves the Supplementary Estimate, to credit the Commission's account today with some £12 million in respect of January and February. This will be financed initially from the Contingencies Fund pending formal proceedings in due course on the March Consolidated Fund Bill.
As I have already mentioned, the Government are applying to the European Court for an interim order suspending implementation of the disputed part of the budget. If our application succeeds, we hope that it will not be necessary to go on contributing to the disputed elements of the budget. If we do not succeed, it may be necessary to make further ex gratia payments in early March and during 1986–87. Any such payments would similarly be financed initially by advances from the Contingencies Fund. From April onwards these advances would be made pending parliamentary approval of a 1986–87 Estimate and the Appropriation Act next summer.
Several members of the Select Committee on the Treasury and Civil Service suggested last week that payment should be delayed until the House has passed a


Consolidated Fund Bill. I have considered these suggestions most carefully, but have to say that I cannot accept them. Payment is urgent, and the best interests of the United Kingdom taxpayer require that we should credit the Commission's account tonight.

Mr. John Browne: Can my hon. Friend assure the House that the Government have investigated fully the ability to pay to the Commission on an escrow basis? Such a payment would not prejudge the court's decision, and interest would accumulate for the United Kingdom if we were proved to be right in our application to the court. That is a common practice in commerce.

Mr. Brooke: The Government have investigated that course, but we could not proceed on that basis because of the effect of current European regulations.
It was not possible to plan on having sufficient time to complete all stages of a Consolidated Fund Bill in both Houses and obtain Royal Assent. These procedures, which are now formal, will be completed as part of the usual March Consolidated Fund Bill. The well understood and recognised role of the Contingencies Fund is to provide for payments that are urgent, in anticipation of Supply procedure. In accordance with the long-established practice, therefore, the Government are justified in assuming that if the House votes in favour of the Estimate tonight, it will not vote differently in the formal proceedings on the Consolidated Fund Bill.
Finally, I shall say something about the Government's statutory authority for making payments towards the disputed element of the budget. This, too, is a subject which was raised by members of the Select Committee on the Treasury and Civil Service. As the special Supplementary Estimate makes clear, this will be one of the many cases where expenditure relies on the House's approval of the Estimate and, in due course, of the confirming Appropriation Act. In the Government's view, such authority is sufficient and by no means uncommon. I should like to explain to the House rather fully why the Government are in no doubt that this is a perfectly proper way to proceed.
As long as the House of Commons provides any necessary funds, a Minister can carry out any appropriate function which has not been prohibited by statute. In the present case, there is no legal restriction which prevents the Treasury from making an ex gratia payment to the Community, and funds are available from the Contingencies Fund initially and then through completion of the Supply procedures.
There are, I accept, cases where specific statutory authority is appropriate, although not legally necessary. The relevant doctrine is based on exchanges between the Treasury and the Committee of Public Accounts in 1932. The Treasury and the PAC reached general agreement on the subject of when an Estimate and the Appropriation Act would not suffice, and I cannot do better therefore than to quote from the relevant Treasury minute on the PAC second report of that year. The Treasury then agreed that
practice should normally accord with the view expressed by the PAC that, where it is desired that continuing functions should be exercised by a Government Department (particularly where such functions involve financial liabilities extending beyond a given year) it is proper that the powers and duties to be exercised should be defined by specific statute.
In all other cases, by implication, the Treasury and the PAC agreed that specific statutory authority was unnecessary.
The Select Committee on the Treasury and Civil Service referred to "Erskine May", page 791. Our proposed method of proceeding does not fall into either category described by "Erskine May" as having been criticised by the PAC. First, this ex gratia payment is not illegal under any existing statute. Secondly, as I have already implied, we do not propose to create a continuing function of Government involving financial liabilities extending over several years. Perish the thought! The procedure that we are adopting for obtaining the consent of the House is, therefore, fully in accord with established practice and with the recommendations of the PAC.
There are two conclusions which emerge clearly from what I have been saying. First, the Government are pursuing the right policies with regard to the disputed Community budget for 1986. Secondly, we are seeking Parliament's approval in the right way. I therefore have no hesitation in commending the Supplementary Estimate to the House.

Mr. George Robertson: It is incumbent upon me, on behalf of the Opposition, to welcome the Minister of State to the first of his many EEC budget debates. It would not be an exaggeration to say that he has marked his debut at the Dispatch Box by not fully taking the House along with him as he advanced his arguments. Basically, the Government's argument, as I followed it, could be summarised by the example of a Mafia mobster saying, "Here is your demand for protection money. I suggest that you pay it. If you do, you will not have a case for going to the police." That seems in logic to be the way in which the Government's argument is being pursued.
The outside observer would regard the Government's posture this evening with incredulity, and wonder what it was all about. Is an ex gratia payment really being made by the Government to an illegal budget in Europe? Is it really a Tory Government, who have arraigned Liverpool and Lambeth councillors in the dock for their illegal budgets, who are happily paying over £6 million a month to the EEC in response to an illegal demand? Is this not unreasonable extortion by the extravagant Brussels machine on the understanding and long-suffering British taxpayer, or is it something entirely different?
On the surface, it seems that we are being presented with a mystery, and the issue was more mysterious when the Minister resumed his place than before he explained the Government's case. In reality, we are faced with a piece of organised hypocricy. We have been presented with a self-generated smokescreen and much of the smoke has been generated by Conservative Back Benchers. The purpose is to disguise the real purpose of the payments.
The Government have brought in yet another duo of Ministers to deal with complex subject. We have another duo to succeed the great Rifkind-Stewart duet, which sang to us in so many previous debates. It was interrupted only by the Halley's comet of the hon. Member for Eastbourne (Mr. Gow), who burst on the stage and made a number of grandiose promises. Before any of us could even quote them, he had disappeared to the Government Back Benches.

Mr. Geoffrey Dickens: Did the hon. Member write this himself?

Mr. Robertson: I am sure that the hon. Gentleman would like an interpreter for these debates but if he listens carefully he will hear an argument that will appeal even to him.
In September the Council produced the 1986 draft budget, which made no provision for the costs of the accession of Spain and Portugal, or for the so-called burden of the past. The burden of past commitments is not yet paid. The European Parliament then chose to add those commitments to the budget. Rather than say that the European Parliament was wrong, the Budget Council of Ministers added 900 million ecu to the budget. That included about 320 million ecu for the cost of enlargement which it had omitted from the original draft budget, no doubt through some misunderstanding. The European Parliament was still not satisfied that the budget would meet all the commitments, and the Council of Ministers then offered to add a further 242 million ecu, but the European Parliament turned it down.
The 242 million ecu is a significant sum. If it had been accepted by the European Parliament it would have reduced the illegality, with which we are so consumed this evening, from 629 million ecu to 387 million ecu. That 242 million ecus would have reduced the illegal supplementary margin to barely 1 per cent. of the total EC budget for 1986. The original climbdown by the Council of Ministers was a visible admission that the original draft budget of September 1985 was wrong and wholly irresponsible, as it was massively short and could not meet the Community's commitments for the following year. If the budget is illegal, the bulk of it is illegal because of the actions of the Budget Ministers, and the Minister was more culpable than most, as he attended the meetings. They knew that they were framing a budget which was inadequate for the demands on it, and they had to admit it to the tune of the 950 million ecu increase that they offered in December.
In the European Parliament the budget Minister's spokesman confessed in December that a further supplementary budget would be necessary later this year. Yet the Ministers, including our Minister, insisted on artificially cutting the amounts that everyone knew would be needed this year. In January the budget rapporteur, Mr. Christodoulou, offered a compromise to the Ministers. He said that if they would agree to a specific amount for the supplementary budget, a deal could be done because the supplementary budget would be necessary. He was spurned, and the Minister led those who rejected and demanded more cuts in the regional and social funds. He continues to insist on the fairy-tale fantasy of budget discipline and farm spending cuts. He is responsible for the budget.
This crisis of illegality is self-created, as is the looming and much greater financial shambles facing the Community. It is pure humbug and pedantry of the worst kind for the Government to attack and lambast the European Parliament, whatever its manifest failings, as a cover for the budget Ministers' short-sighted, weak-willed abdiction of control over the common agricultural policy's appetite for Community cash.
Why this great speed? By midnight tonight the House must agree the payment through one of the most unique forms of parliamentary subterfuge. In April 1985 Ministers passed the intergovernmental agreement to cover the shortfall in the 1984 budget. It was agreed in April, came before the House in June, and the Government

delayed ratification until November and did not make the payment to Europe until a final demand was made by the budget Commissioner at the end of 1985.
Many hon. Members who questioned the Minister will be interested to know that in 1984, the last full year for which accounts are available, the Court of Auditors' report shows that the European Parliament also added expenditure to the European social and regional funds. Ninety four million ecu was added to the budget, but not a single ecu was spent by the Commission on items outwith the Council of Ministers' budget. Although we shall pay the European Commission, it will not spend the money on the items that are laid down by the European Parliament. Every hon. Member knows that the Commission will spend it by and large on the obligatory side of the equation which grows inexorably every day — on more and more Community farm spending. Taxpayers are the last people likely to get back anything from that. In 1984 the Commission ignored the additional provisions, and the money simply disappeared yet again into the vortex.
The crux of the matter, of which Conservative Members will undoubtedly make a meal, is: if the Government are so sure of their ground on illegality, why are they capitulating so easily and quickly? The supplementary memorandum to the Select Committee makes it absolutely clear. It states:
The Government's lawyers have advised that there is no legal obligation on the United Kingdom to pay the disputed amounts.
That could not be clearer. Why are the Government, who have arraigned councillors and threatened them with disqualification, surcharge and bankruptcy, laying down their arms and surrendering before the European Parliament, if their case is so strong?

Mr. Dykes: Has not the hon. Gentleman missed the Minister's point, which is that precisely because there is no legal obligation to make the payment, the act of making it in advance of the court's judgment increases the Government's moral and juridical position?

Mr. Robertson: The hon. Gentleman is a suave operator in most circumstances, but one would have to be truly gullible to accept that argument. If this is a juridical court considering the case, there is absolutely nothing to suggest that the fact that one has made illegal payments gives one higher ground over one who says that on principle there is no legal case for paying, goes to court and argues the case.

Mr. Budgen: One would certainly think that of a judge in the United Kingdom, but judges in the EEC may be affected by political considerations, such as whether the money has been paid. Indeed, that could be a reason why the lawyers who advised my hon. Friend the Minister did not wish their advice to be made known to the House. If the judges of the EEC are politically corrupted, it is an important issue, about which the House should know.

Mr. Robertson: The hon. Gentleman makes at least one valid point. If European Court judgments are to be influenced by the willingness of parties to make payments which they believe to be illegal, we should be worried about it. The Minister's interpretation is interesting, and I am sure that it will be studied by constitutional lawyers, who have greater skill than I, with due care and attention. Whatever legal advice is being given to the Minister, some


of which he has faithfully relayed to us, it will undoubtedly be made available to the House and the wider world via Mr. Chris Moncrieff or some other oracle.

Mr. Teddy Taylor: Will the hon. Gentleman explain to my hon. Friend the Member for Harrow, East (Mr. Dykes) something which may have escaped his broad vision? If one makes the payment before the matter comes up in court. and if the other part is spent, there is no point in winning the case at all.

Mr. Robertson: Payments to the EEC are made on a monthly basis. If we are right, we can stop those payments at any time and make sure that the balance is kept at the end of the financial period.
How limp and lame the Minister's explanations are this evening. It is doubtful whether anybody in the House accepted the limp and lame excuses he has given. They seem even more limp and lame when set against the backdrop of the penal sanctions levelled against rate-capped councils in this country. Of course, it does not just smell of that. It smells of a cover for something else which has nothing to do with the claimed illegality of that 1 per cent. of the budget which the Parliament has added to its estimate. The truth is that it is yet another payment to fuel the mighty and uncontrollable engine of the CAP, which is yet again driving the Community into another horrendous financial crisis. This is not a payment on account and it will not be returned to this country even if the court action over the 1 per cent. is a triumph for those self-same legal masterminds.
In his evidence to the Select Committee the Minister said:
the disputed elements in the budgets are likely either to be repaid to the United Kingdom or to be broadly offset by extra receipts from the budget: the disputed elements related mainly to the Regional Development and the Social Funds.
On Monday December 2 in the Financial Times the regional commissioners of the EEC made it clear that
Britain is in danger of suffering most from the freeze on EEC spending on the social and regional fund next year".
Even if the Minister's prognostications come true we shall not find ourselves in balance, because when the funds for the regional and social fund dry up in the middle of this year, as everybody confidently expects, Britain is likely to lose most. It is simply providing more cash for the EEC to rescue the budget Ministers from the dishonest and shoddy way in which they put together a budget for 1986 which did not add up, will not add up, and cannot add up, and which will inexorably demand more and more cash as the truth catches up with it.

Mr. Marlow: rose—

Mr. Robertson: The truth makes the Supplementary Estimate look like a petty cash box. We have a right to expect frankness, perhaps a rare frankness, from the new Minister about the scale of the real crisis and the kind of demands likely to be made on the British taxpayer this year.
Budget commissioner Hanning Christopherson was right in January when he warned that regional and social fund projects would grind to a halt this year on the basis of present funding. As I said, we have been warned by the regional commissioner that the United Kingdom will suffer most heavily if spending is curtailed. That news is bad enough but as usual there is worse to come. The 1986 budget, even the illegal one over which we are getting

heated this evening, has some vital pieces missing from it. There is no provision in that budget for the 1986 fixing of agricultural prices. We know what that usually leads to. Secondly, and most significantly, there is no provision for a change in the dollar-ecu rate, which has already this year added 400 million ecu to the CAP expenditure. Thirdly, there is no provision for the massive drop in world grain prices, which is likely to bloat European Community costs and keep the price of food ludicrously high for British citizens.
Mr. Junker, who spoke on behalf of the budget Ministers in the Parliament, was spot on when he warned of an indeterminate supplementary budget to be presented to European taxpayers later in 1986 like some sickening surcharge on a long paid-up continental holiday.

Mr. Austin Mitchell: There is no pleasure in it.

Mr. Robertson: Not all holidays are pleasurable, as my hon. Friend knows.
The debate is about the truth of the European Community budget discipline which we have been promised again this evening, as though telling us about budget discipline was a substitute for budget discipline itself. We warned at the time that budget discipline was a sham and it is now seen to be as bogus as we predicted.

Mr. Marlow: rose—

Mr. Robertson: Will the hon. Gentleman bear with me? Many hon. Members wish to speak and I do not want to use too much of the short amount of time that the Government have allowed for the debate.
The debate is about a European Community, the whole effort of which is now being subverted by a farm policy that has gone berserk and which now consumes 74 per cent. of the entire budget and which again threatens to burst its banks. Agriculture should be at the front of our minds this evening because it is the common agricultural policy that is at the heart of the shambles and that will bring this hapless Treasury Minister, as it did with so many of his predecessors, back to the Dispatch Box again and again this year.
The newly promoted Secretary of State for Scotland, the predecessor of the new Minister of State, Foreign and Commonwealth Office, stood at the Dispatch Box on 14 November and used the memorable words "an inbuilt control" when referring to agricultural spending. The right hon. and learned Gentleman has an affectation for not using notes when making his speeches. If one is being generous to him one could say that it was a lack of notes that made him so rash and brave as to utter those words. I think that those words should give comfort to many hon. Members on the Government Back Benches because if someone can say something like that without shame and get in to the Cabinet there is hope for many others to come.
We now know what he meant by those words. He was talking about a secret report. We know that it is a secret report because we read about it in the Financial Times. That report has been drawn up by Mr. Frans Andriessen and Mr. Henning Christophersen, the farm and budget commissioners. It tells us that the unsold food in store in the European Community is now worth 10·5 billion ecu. That is 10 times the stocks of only four years ago. Cereal stocks alone are up from 6 million tonnes to 17 million


tonnes in the last year. The cost of storage and destocking is up by 1 billion ecu this year, to 4·4 billion ecu. That is nearly one quarter of the entire agricultural budget.
From the Press Association tapes this evening we learn that the journal Agra Europe tells us that Commissioner Andriessen has today called for an extra £2,000 million over the next three years to set up a special stock dumping fund for special additional subsidies to dump food surpluses on the international market—additional money for an additional special fund yet again. That is all happening as farm incomes drop this year across the Community by 8 per cent. and fall in this country by 17·5 per cent. If that is what is known as "inbuilt control" we know precisely how to trust the Government's estimates. All the time the discipline disintegrates as American grain prices fall on the international market.
In November we reminded the then Common Market team here that the existing budget was only 150 million ecu from the 1·4 per cent. VAT own resources ceiling. We demand and need to know where that is now. There is the extra 400 million ecu for the drop in the dollar-ecu rate. There is the extra £2,000 million over three years for the special fund. The regional and social funds are drying up. The agriculture prices are still unfixed. When all those things are happening, how far are we from the ceiling on own resources? How much will be needed in intergovernmental agreements and cash handouts to the Community this year to keep the bloated food surpluses growing? The House has a right to know, especially in the context of the debate. It is time that Ministers told us what they know to be the truth about what is yet to be demanded.
The Government come here today telling the House that this is a one-off payment, a temporary payment, until they can get the illegally demanded cash back. They seem willing to face the rage of their Back Benchers, or maybe it is all a big misunderstanding again. Conservative Back Benchers are raging against those payments, made under extortion. The Government want that rage turned away from the incompetence of Ministers, including British Treasury Ministers; away from the sheer irresponsibility of the looming financial fiasco, and what it will mean for this country's taxpayers. The Government want that rage to be turned away from the fact that this is the start of another drip feed, not to food aid or regional or social fund schemes, to which some of us would subscribe, on a regular basis, but to an uncontrollable common agricultural policy. They are willing to face all that rage and embarrassment to protect the pure fiction that this is an ex gratia payment, and a reimbursible one at that. They may fool some of the people in the Chamber, although it seems to be precious few, and they will probably fool a few Conservative hon. Members who vote, but they do not fool the Opposition.
As the House of Lords report told us in December, the European Community's agriculture budget is out of control because of a "lack of political courage" to do something about it. When the Government and their Ministers representing us in the European Councils have the courage to control farm spending before it bankrupts us all perhaps we shall assist them in putting through measures such as tonight's, but in the meantime, as they watch farm spending spin away again into the red, and

while all the time they champion and protect the charade that budget discipline is working, we shall, with honour and conviction, vote against the motion.

Mr. Terence Higgins: This is the sort of debate for which those concerned with parliamentary control of public expenditure require either a strong stomach or a very strong sense of humour. It raises several serious issues that we shall have little time to debate as we should.
I do not believe that one's attitude to the Estimate turns on whether one is in favour of or against British membership of the EEC. The plain fact is that it gives rise to more cause for concern for those who, like myself, are in favour of membership of the EEC than for those who take the opposite view. It is a dangerous development that has been described by my hon. Friend the Minister of State.
I am sorry that the Select Committee on the Treasury and Civil Service was unable to produce a report on the matter because of the short time that we had to go into it. I hope that the evidence that we took, which is available in the Vote Office, will be of interest and help in clarifying a complex situation.
The Minister of State rightly said that the first part of the Estimate is concerned with repaying to the Contingencies Fund some £118 million, expended at the end of the past year, which meets the tranche of the additional own resources that were paid in advance. I do not wish to comment on that now. I hope that the Select Committee will look further into it. We do not get interest on the advance payment that we have made, and we are now being told that we shall pay penal interest on the ex gratia payment, referred to in the second part of the Estimate.
We are faced with a budget that is clearly illegal, and raises some difficult questions. It is true that, even if we succeed in the court case and the budget is declared illegal, the budget as it then stands will still be one that the Government oppose as not being consistent with effective budgetary discipline. Yet that is the basis on which the House was persuaded to increase the own resources from 1 per cent. to 1·4 per cent. That is very important. At that time, several of us said that in our view the intergovenmental agreement was not consistent with the treaty, and it was wrong that the situation should arise in which budget expenditure exceeded available revenue. That view has been upheld by the EEC's own Court of Auditors. Therefore, I hope that there will be a further statement on that aspect.
The Estimate itself raises several important questions about parliamentary procedure, to which the Minister of State referred at the end of his speech. As my hon. Friend said, it is true that in 1982 the Select Committee objected to a system whereby money was paid to the EEC out of the Contingencies Fund and reimbursed by a spring Supplementary Estimate. The procedure now adopted is also objectionable. We have before us an Estimate, but we do not have before us a Consolidated Fund Bill. Under the new procedures nowadays, that is entirely formal. There is no reason why we should not have had a proper Consolidated Fund Bill, even in the short time that is now available to us. That would have been the right procedure for the Government to adopt.


The more important point that gives the Select Committee cause for concern, to which the Minister sought to reply, is the fact that there is no underlying legislation, no primary legislation, which would justify the payment. The House is being asked to make an ex gratia payment that is not covered by existing legislation. As the Minister of State said, it is possible for a Government to put forward an Estimate, a Consolidated Fund Bill and so on, which provides the basis for the expenditure being made. But I question strongly whether what my hon. Friend said in his closing remarks was correct, because the Public Accounts Committee, on former occasions, has drawn attention to the way in which the procedures can be abused. In particular, I refer my hon. Friend to page 791 of "Erskine May," which says:
Expenditure by a department for purposes not covered by its existing legal powers normally requires to be specifically authorised by a financial resolution associated with a bill".
That is not being done in this case. The Minister sought to make a distinction and to say that the circumstances that we now face were appropriate, but "Erskine May" states later on:
There have been cases, too, in which the Appropriation Act has been used, not merely as a substitute for specific legislation, but to override the limits imposed by existing legislation.
The Minister of State did not answer that point. I believe that it is clear that we are overriding
the limits imposed by existing legislation.
That is embodied in the European Communities Act 1972, which in turn is reflected in the treaty. The Government themselves say that what is happening is illegal. Therefore, it seems to me that they are going beyond the existing legislation. That is an abuse of procedure of the sort to which the Public Accounts Committee has objected. I hope very much that the Public Accounts Committee will look into that matter and let us have a considered view. Perhaps such abuses could be prevented in future by the Standing Order being amended, for example.
It is also objectionable to use the Contingencies Fund if one has time to go through the proper procedures. There is no reason why we should go on this merry-go-round. We could have had the Estimate, a Consolidated Fund Bill and a Bill justifying the payment in the time that is available, short though that has been.

Mr. Deakins: Will the right hon. Gentleman give way?

Mr. Higgins: I should like to continue because hon. Members wish to speak, and this is a difficult matter to explain.
I now come to the substance of the argument. I welcome the fact — it is common ground — that the Government believe that the way in which the European Parliament has behaved is illegal. In my view, they are right to fight the case, as the Council of Ministers is right to fight the case. It would be an enormous extension of the powers of the European Parliament if it were allowed to get away with what it is seeking to do.
The Government are right to take the action that they have proposed. Nevertheless, I am very doubtful about the ex gratia payment device. The Select Committee was told that it was essential that this procedure should be ratified by midnight tonight, otherwise there is a danger that we shall be charged interest on the ex gratia payment. This is pure Alice in Wonderland. We ought not to be confronted by such a ridiculous situation.
I believe I am right in saying that all Conservative Members have grave doubts—nobody, apart from my hon. Friend the Minister of State, has expressed a contrary view — that our chance of winning the case will be enhanced if an ex gratia payment is made. If the Government have confidence in the strength of their case, that is a very odd approach.
My hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison) asked whether we would get back the ex gratia payment if we won the case. I was heartened when my hon. Friend the Minister said that it could be deducted from a future payment, but I should like to know the basis for his statement. I was not aware that we could adopt such a procedure.

Mr. Brooke: I understood my hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison) to be asking his question in the event of the interim action being decided in our favour. I said that any sum that we had previously paid might be deducted from future payments, but that it would depend upon the judgment of the European Court in response to our interim application.

Mr. Higgins: I am not sure that I understand that answer. We should like to know the basis for my hon. Friend the Minister's statement. It appears to contain a large number of uncertainties. If we are to make this ex gratia payment we need to know whether, if we win the case; we shall get it back; otherwise it will be a straight payment to the European Community.

Mr. Peter Thurnham: The fact that interest rates are higher in this country than in most of the other European Community countries suggests, surely, that the penalty factor should weigh less with us than with others, and it is all the more reason for us to be given credit for the interest charged if the payment is found to have been unnecessary.

Mr. Higgins: I agree with my hon. Friend. Most unfortunately, however, the Select Committee understood that we should be charged a penal rate, the highest rate in the European Community, which is over 20 per cent. I am therefore unable to reassure my hon. Friend on that point.
The argument is simple. It turns upon the legal advice and the expert advice that was given. After two and a half hours of questioning, in which my hon. Friend the Minister of State, Treasury, was as forthcoming as he could possibly be, he failed completely to produce any substantial legal argument which suggested that we stand a better chance in the European Court if we pay in advance than if we do not pay in advance. It was pointed out earlier that it would be very surprising if the European Court were to be influenced by that kind of payment.
The whole matter gives one very grave cause for concern. There is no evidence that budgetary discipline is effective. The non-obligatory payments are in excess and the obligatory payments for agriculture are far in excess of anything that had been justified in argument to the House. Unless, therefore, my hon. Friend the Minister of State can do very much better in his winding up speech than he did in his opening speech, I fear that I shall be unable to support the motion.

Sir Russell Johnston: The right hon. Member for Worthing (Mr. Higgins) has made his usual careful and in debates of this kind, highly


critical speech. I do not propose to follow him into the legal and constitutional area. I am well aware that I do not share his competence. It is sufficient to say that, particularly for the layman, there is a great deal of uncertainty about the legality of the European Parliament's action. I presume that we should not be going to the European Court unless there was an argument about its legality. I presume that we should not otherwise be going to the European Court to establish whether its action was legal or illegal.
There is also uncertainty about whether the Government have exceeded their proper powers. I fail to follow why an ex gratia payment should affect a judgment of the European Court. It was suggested in an intervention by the hon. Member for Wolverhampton, South-West (Mr. Budgen) that the judges of the European Court are politically corrupt. That may have been a rumbustious way of putting it rather than a serious suggestion. At least, I hope so. In our view, the Community budget—

Mr. Marlow: There is only one of you.

Sir Russell Johnston: There are two of us. The hon. Gentleman's mental powers have been failing for many years. His eyesight seems to be following.
The Community budget is inadequate to meet effectively the redistributive and regenerative roles of the European Community, which have been unable to develop properly. I refer in particular to the regional and social funds. I recall, because I was there, that when the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) was the President of the European Commission he referred not to a 2·5 per cent. but to a 1·4 per cent. of VAT budget. The Liberal and Social Democratic parties believe that a way should be found to give the directly elected European Parliament more budgetary authority. That was stated clearly in our manifesto.

Mr. Heathcoat-Amory: Will the right hon. Gentleman give way?

Sir Russell Johnston: I shall give way in a moment.
We dissent from the approach which the Government and the Opposition have adopted to the budget. We wish that a more generous approach had been adopted, even before the Council's "Second Reading" debate. If that had happened, we should not be in this mess.

Mr. Heathcoat-Amory: We respect the hon. Gentleman's pro-European views, but we are not debating whether the European Community's budget is good or desirable, but whether it is illegal. Is the hon. Gentleman saying that he wishes this House to condone and to be an accessory to an illegal act?

Sir Russell Johnston: I am saying no such thing, nor am I quite so sure as the hon. Gentleman is what it is we are debating. I suspect that in all of these debates we are debating practically the same thing, and I do not believe that quite that distinction can be made. We believe that the European Community should have a greater role to play in non-obligatory expenditure. That is in question tonight because of the actions of the European Parliament.

Mr. Marlow: Will the hon. Gentleman give way?

Sir Russell Johnston: Before I give way to the hon. Gentleman—there must be a record kept somewhere of

such things—for perhaps the 54th time, I would remark, as the Minister did en passant during his speech, that the agreement on budgetary discipline, which with some justice has attracted a bit of scorn, has, nevertheless, not yet been breached on non-obligatory expenditure, where, after all, the problem of excessive expenditure arises.

Mr. Marlow: I am grateful to the hon. Gentleman for his courtesy. He says that he would like the European Parliament to have greater budgetary powers. Does that mean that it is the Liberal party's policy that the European Parliament should be entitled to levy taxation upon the British people? What else could it mean?

Sir Russell Johnston: In the long term a way must be found to do that.

Mr. Marlow: A sharing of burdens.

Sir Russell Johnston: Certainly a sharing of burden. One of the great criticisms of the European Parliament at the moment is that it has the power only to spend taxation without any responsibility for the raising of it. There is no direct accountability, and that is a fair criticism. So, yes, essentially I would agree with the hon. Gentleman, but before I leave that point I must add that we must remember that while it is true that the European Parliament has added to the budget, when it comes to the actual expenditure of that money it is not the Parliament that spends it, but the Commission, and the Council regulates that expenditure and determines what are the proper projects.
Essentially, I am saying that the situation in which we now find ourselves need not have arisen if the Government had adopted a positive approach in Milan and Luxembourg when there were the makings of an acceptable accord in the Council which Parliament would have considered to represent a reasonable response. We have brought this on ourselves. It is tragic that we should now have got ourselves into what is clearly a thorough-going legal mess, which, in response to an intervention from the hon. Member for Northampton, North (Mr. Marlow) the Minister said could well go on for 18 months or so before a determination is made, and it is likely that the institutional conflict will worsen during that time.
The way in which the European Parliament has behaved has been heavily criticised by those unfavourably disposed to the EEC in the press and elsewhere, and doubtless there will be criticism during the debate, but, as the hon. Member for Hamilton (Mr. Robertson) said in an incisive speech, this is "a self-created crisis" and those responsible are the Ministers whose original draft budget was grossly inadequate and who failed abjectly in a situation in which a rational negotiated settlement could have been achieved. To that failure British Ministers made their full contribution.
The Parliament has added 1 per cent. of its budget. That is the scale of this issue, as the hon. Gentleman reminded us. I must support the hon. Gentleman on the fact that the regional and social funds may run out. That is a real danger. He is right. That is the sort of thing to which the Government should be addressing themselves anxiously. I also agree that the problem of the CAP is at the heart of this. Although, as I have said many times, it is an illusion to believe that somehow or other that can be dealt with at a stroke, what disturbs me is the absence of a clear forward plan.
That is the serious issue, not the desire of the Parliament to try to ensure that the Community's limited


social contribution is sustained. Those circumstances do not require one to oppose the Government in the Lobby, even though one is highly critical of the way in which they have conducted affairs.

Mr. Hugh Dykes: The hon. Member for Hamilton (Mr. Robertson) said that he would be brief and then spoke for 26 minutes.

Mr. George Robertson: I never said that I would be brief.

Mr. Dykes: Perhaps I misheard. I thought that that was the implication of his anxiety to get on and not take interventions.

Mr. Neil Hamilton: The hon. Member for Hamilton (Mr. Robertson) said that he would not take long.

Mr. Dykes: The hon. Member for Hamilton then spoke mostly about agricultural policy, but I agree with the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) that he put his finger on the reality of what had happened in what amounted to the Council of Ministers' obstinacy and obduracy in failing to grasp the realities of the situation with the enlargement of the Community. What other course did the European Parliament have, faced with that obduracy and refusal to draft a proper budget, even to use the appropriate conciliation mechanism, than to do something that can be regarded in some circles as an illegal act? We may have to reserve our judgment on that until the European Court reaches its decision. It may dig up all sorts of precedents and evidential items which show that the European Parliament had no other realistic course of action. It would be wrong to predjudge that, so we are dealing with only a technical motion tonight.

Mr. Teddy Taylor: Is not the argument about what else they could do exactly the same argument used by the Socialist councillors of Camden and Liverpool who took the view that the limitations imposed by the Government did not allow them to spend as much money as they felt was right? Therefore, is not my hon. Friend supporting the Socialist councillors of Camden and Liverpool in breaking the law?

Mr. Dykes: Despite the obvious temptations, my hon. Friend is not right in trying to draw that comparison between the domestic political crisis between local authorities and the Government, and the European situation. The conciliation and consultation procedure in the budget formation of the EC is a different exercise where the parties get together round a negotiating table and negotiate agreed figures, not on obligatory expenditure but on non-obligatory items.
Once again, it shows that the whole budget procedure is out of kilter because the European Parliament should now have a greater role and should be able to deal with much more than a tiny marginal tranche of total spending in non-obligatory categories unless the Council of Ministers is to be more like-minded with the European Parliament in future on taking budget outlays ahead as the Community expands, both on enlargement and the need to spend more on the regional and social funds.
Of course, hon. Members and others are right to put their finger on the glaring problem that is building up over

agricultural spending. But in dealing with the motion tonight it is absurd for my hon. Friends—there is a glaring absence of Labour Members, who, apart from one distinguished presence on the Opposition Back Benches, do not seem to be interested, and Members of other parties,—to express, I hope not in a semi-hysterical fashion, tremendous indignation about what is a technical motion on a Supplementary Estimate. I think that it is literally correct to say that it should excite no one beyond saying that we are all in the business of trying to control, rationally and reasonably, Government spending.
We all listen with great care to everything that my right hon. Friend the Member for Worthing (Mr. Higgins) says on this subject. He knows a profound amount about it. But even he faces the danger of always being much more excited and indignant about tiny amounts of money in the EC than about domestic items. We are talking about £6 million a month of extra interest payments to be incurred and £18 million over three months in comparison with huge quantities of domestic Government spending which, if one looks back at the record of what was said in Committee and in the House, he and other hon. Members do not get so worked up about.
I do not often hear my hon. Friend the Member for Southend, East (Mr. Taylor) referring to the fact that we now spend £20 billion on unemployment benefits because of our huge level of unemployment. Surely that is a much more serious problem than the minuscule amounts of money in the EC. Even the total budget of £22 billion. is tiny in comparison with the total United Kingdom Government's spending of £150 billion. Our portion, moreover, as a result of the budget rebate—that has not been referred to so far tonight, although we are only halfway through the debate, and I hope that my hon. Friends will refer to it—swamps any tiny amount that we have to pay here, we hope temporarily, as a result of the future court judgment, on the basis, I presume, of expert legal advice.
My hon. Friend the Minister referred to that and I am content that on the basis of sound legal advice from Government lawyers, they have decided that that is correct. The revelation of Legal advice to Government is always a difficult area. I said that on the basis of what my hon. Friend said. I am content to rest on his recommendation that, on the basis of legal advice received by the Government, it seems right to make that payment. It would look awful and crazy if we were to take a position separate from the other member states who, with their equally clever and highly paid Government lawyers, have decided to pay the money in advance. It would look ridiculous if there were a difference of position. The court would notice that immediately.
It is important for the position of the Council, even of one disagrees with the larger background which, as a good and enthusiastic European I do, that it and the Government should maintain the same position. Perhaps the Governmment feel that they are likely to win the case anyway, and then the money can be refunded.

Sir Nicholas Bonsor: rose—

Mr. Dykes: If my hon. Friend will forgive me, I shall not give way, because by looking at the clock, I know that it would be unfair on other hon. Members.
Let me assume that the money could be refunded. To some extent, this is new territory, and I can only say with


my subjective confidence that we shall get most of the money back. This is the only, absolutely essential, way for the Government to establish their moral position in the face of such a course of action. They must be whiter than white as they approach the European Court, and be able to say that they have done certain things that their legal advisers have suggested that they do.
This may be a historical judgment about the relationships between the institutions of the Council of Ministers and the European Parliament. Tonight's motion is only a small, limited part of the wider scene and it would be wholly irresponsible for hon. Members, particularly those on my side of the House, not to support the Government on the motion, which remains entirely technical. It is not a matter to cause great anxiety and it is much more important to see the wider picture both for the development of the Community budget — the 1986–87 budget will be even more important because of its expenditure on agriculture—and the way in which the Government will respond when the court has had time to deliberate.

Mr. Eric Deakins: I remind the hon. Member for Harrow, East (Mr. Dykes) that big issues can arise from the expenditure of small amounts of money. I refer him to the 1630s and the case of ship money, which eventually involved the country in a civil war. The principle is what is important, rather than the amounts at stake.
The right hon. Member for Worthing (Mr. Higgins) made an interesting speech. Tonight we are dealing with a House of Commons matter, to which there are two aspects. The right hon. Member spoke about one aspect, that of Supply procedures and so on. The PAC, of which I have the honour to be a member, may need to take a look at procedures again. Apparently it has not done so since 1932.
The PAC should say, in the light of the interim judgment given by the court, whether we should seek to make some other recommendations, if the court were to refuse the interim judgment for which the Government have asked and we were therefore obliged to make these ex gratia payments until the court had reached a substantive judgment later in the year. In those circumstances, we would have to make sure that the Government provided time in the next financial year for us to consider these things properly as this Supplementary Estimate takes us only to the end of the financial year.
Some substantive issues have been raised. This is a House of Commons matter, and I am concerned about the aspects of the relationship between the Assembly and the Council of Ministers. In a sense, the Council of Ministers is a euphemism for national Governments and Parliaments, because that is what it represents. The issues that we have raised are at least as important as those raised when we discussed the intergovernmental agreement which was outwith the treaties and possibly the most important aspect of our relationship with the EEC institutions since we joined in 1972–73.
I have been pointing out for several years that the Assembly is constantly seeking to increase its powers. I see at least four federalists here today, on both sides of the House, and they will naturally welcome that move. In its

attempts to increase its powers, the Assembly is constantly aided and abetted by the Commission and, where appropriate, by the European Court. I am not as sanguine as the Government that we shall necessarily win the dispute when the Court makes its substantive judgment.
The Assembly has passed an illegal budget and the Commission is backing that against the Council. This is part of the process of creeping federalism, whereby Community institutions are always working to increase their power, not always but often, at the expense of national Parliaments, and there is a ratchet effect because power once conceded to the EEC is never regained. Therefore, the Assembly, the Commission, the Council and the Court are constantly receiving accretions of power, gained in various ways and through various procedures within the Community. That strengthens their power as against national Governments and Parliaments.
Control of finance is the key to power, as we know from the history of this country, and the Assembly recognises that. In its budget resolution, the first of two last year, on 14 November 1985 it said, in paragraph 9:
the Commission should submit to the budgetary authority a proposal for a minimum-term course of action taking account of the need for the gradual transfer of certain funding operations from the national to the Community framework".
Funding operations are a means of raising money — forms of taxation. That shows the way that the mind of the Assembly is always working. We should always have that in the back of our minds.
The battle between the Assembly and the Council over funding is a battle between the Assembly and national Parliaments. The House could teach many in Europe a great deal about these things. We also have an important right. Federalists will support the Assembly, and we have already heard one or two expressions of support. However, non-federalists, and even those in favour of the Community, such as the right hon. Member for Worthing, will have to take careful note of what the Assembly is trying to do. Even the Government, in the Treasury minute to the Select Committee on the Treasury and Civil Service, made clear their view that this would be a major change in the balance of power between Community institutions, and therefore between Community institutions and this national sovereign Parliament.
As is well known, the history of our Parliament started with disputes between Parliament and the Crown over the power to tax people. It was only later that Parliament sought to gain control of expenditure. In the case of the Assembly, the process has begun in reverse, partly because of the powers given to it in the Community treaties. It is starting with the power to spend money. In paragraph 16 of the budget resolution it says that the Assembly
Takes the view that the Community cannot ignore or curtail, via the budget for 1986, the financial commitments it has entered into: is therefore resolved to ensure compliance with this principle throughout the budgetary procedure".
In other words, it is saying that spending must take priority over raising money to finance the expenditure. Eventually that will lead to the Assembly demanding the power to tax as well. We have already heard something about this from the federalists tonight.
The annual report of the Assembly is entitled "Progress towards Integration" and it shows, in the report of the budgetary committee, that it is working towards this. At long last, the Government have finally woken up to this creeping federalism. It was remarkable that the Prime


Minister, in her statement to the House on the Luxembourg summit, consistently throughout both statement and answers—I bet that there were many anguished faces in the Foreign Office — used the words " European Assembly" to describe what she had previously called the European Parliament.
The Assembly has been encouraged in this spendthrift approach by the big increase in own resources that this House and other Parliaments have granted. Its debates show that the Assembly is looking forward to the 1·6 per cent. VAT rate being introduced at a much earlier date than the Council and the Government would wish.
But that is not the only thing that has encouraged the Assembly in its spending spree. It has now proved possible, through the intergovernmental agreement, to raise money outside the framework of the treaties. Those two facts combined have convinced the Assembly that it an do what it likes on spending—we shall see more of this in the future—because national Governments will pay in any case, whether the spending is legal or illegal and whether or not it exceeds the budget. That is a cavalier attitude to expenditure and a threat to budget discipline.
The House must accept that the Assembly does not consider itself bound by budget discipline. Paragraph 12 of the budget resolution of 14 November states that the Assembly
expresses its support for measures to contain expenditure as part of a coherent reform of the common agricultural policy, but demands that the nature of such containment be jointly defined by the budgetary authority and the Commission"—
that is, the Assembly and the Commission—
and repudiates any unilateral decision by the Council in the matter.
That means that the Assembly will not go along with budgetary discipline until its powers are substantially increased by agreement with the Council and, no doubt, with national Governments.
The Assembly is now an enemy of national Parliaments in the EEC. It is competing for a share of the real power currently exercised by national Parliaments. It is encouraged by more powers than were given to it at the Luxembourg summit. It has an insatiable appetite for power and it must be stopped. The question is whether the action that the Government are taking will stop it.
I hope that the Minister can reply later to two semi-legal points. First, the Council is taking action under article 173 of the Treaty of Rome which states:
The Court of Justice shall review the legality of acts of the Council and the Commission other than recommendations or opinions.
Nothing in that article states that the court shall review the actions of the European Assembly. Therefore, it makes it all the more astonishing that, with all their substantial legal advice, the national Governments represented at the last Council meeting did not seek to couple the Commission with the Assembly in the substantive court case. If they had coupled the two, they might have lost on the Assembly—because it is not mentioned in the article—but they would almost certainly have won on the Commission. I do not understand why the Government weakened their case on the substantive issue by not using the words in article 173 and taking parallel action against the Commission.
If the Minister cannot reply to my second point tonight, I hope that he will none the less consider it carefully, because it is in the interests not only of the House but of the Government. Later this year, we are threatened with a supplementary budget—everyone agrees that that is

likely—and my hon. Friend the Member for Hamilton (Mr. Robertson) made clear what the components of that budget would be and what its causes would be. If there is a supplementary budget, in addition to the budget that the European Assembly increased, will that not weaken our case before the court? We shall be asking national Parliaments for money additional to the budget that was originally approved by the Council and rejected by the Parliament. If I were not parti pris in the matter. it would suggest to me that the European Assembly was right in its attitude to Community expenditure in 1986. If and when the Government are faced with a supplementary budget, I ask them to think carefully about whether it might prejudice their position and that of the Council on the main issue.
If the United Kingdom loses, the Council and national Parliaments will have serious problems. More power will be granted to the European Assembly and it will mean an end to any semblance of budget discipline. An adverse verdict would lead to a crisis in the relationship between Britain and the rest of the EEC. I look forward to that very much.

Mr. Nicholas Budgen: Anyone listening to my hon. Friend the Minister of State opening the debate would have concluded that it was a debate of great technicality and that only those who have studied the European institutions and obtained a PhD in law could usefully consider the matter further, but that is not so. The debate is mostly about a relatively simple value judgment as to how people get their will in political institutions.
We start with the assertion set out in the Government's briefing to the Treasury and Civil Service Select Committee that the legal advice is that failure to pay in full would impair the United Kingdom's posture before the European Court. Yet my hon. Friend has never explained that to the House or to the Select Committee. He has never — as my right hon. and learned Friend the Foreign Secretary would say—addressed himself to the question of how the judges could disadvantage the United Kingdom in the proceedings. It must be emphasised that there are multiple proceedings. Of course, the proceedings brought by the Council could be dropped, but separate proceedings have been brought by France, Germany, Luxembourg and the Netherlands.
We know that France, Germany, Luxembourg and the Netherlands have already paid on the nail, so let us consider the likelihood that at least one of those nations will continue with its proceedings. How will it be possible, on this issue of principle, to disadvantage the United Kingdom as against another nation state? My hon. Friend has not explained, and I do not believe that it is explicable.
My hon Friend has not explained whether he is serious in his implied criticism that the EEC judges are affected by political considerations, but that is perhaps a narrow point.

Mr. Forth: Does my hon. Friend share my sense of mystery about how the court will be swayed in its consideration of the matter by whether Britain pays on this occasion, yet the Commission and the European Parliament are prepared to overspend illegally in advance of the judgment? They do not believe that that action will prejudice their case in front of the court, yet we are being asked to accept that if we do not pay it will affect us.

Mr. Budgen: I share the mystery. Like all great mysteries, it is incapable of explanation. Had it been capable of explanation, I am sure that my hon. Friend the Minister of State would have explained it long ago.
We are talking about political will. Anyone who observes the forces in the EEC institutions and here must have sympathy for a Treasury Minister who is trying to contain expenditure in the EC. The hon. Member for Walthamstow (Mr. Deakins) set out helpfully and with great knowledge the way in which the European Parliament, as it calls itself, wishes to extend its power to the disadvantage of the Council of Ministers, often with the connivance of the Commission. There are assertions that a proper system of budgetary control has been instituted, but we must compare those assertions with our knowledge that the American farmer will be substantially better supported by a new farm Bill. We know that the Americans are trying to reduce the value of their currency against that of other countries, and we know the effect that that will have on the cost of disposing of farm surpluses created by the EEC. Those who see those forces must sympathise with the Treasury in trying to push back this vast tide that is enveloping it.
We must also consider the political forces. The Labour party says that it favours strict control of expenditure in the EEC, but it also talks about the EEC being an organisation that can reduce unemployment in Britain. Labour Members speak in grandiloquent, even mawkish terms, about the regional and social funds. Even if the present Government are, at best, only lukewarm on industrial intervention, we are led to believe that a Labour Government would favour more EEC expenditure to create jobs.
The Liberal party is much more open about that. It is in favour of a very much higher level of expenditure, particularly on the infrastructure of the EEC. To that end, Liberal spokesmen say that they would be in favour of a much higher contribution from VAT to the EEC. They are quite open about that.
The constitutional, economic and political forces are all against the restriction of expenditure in the EEC. What is required most of all from the United Kingdom at the present time is a gesture of political will. We have the opportunity now to demonstrate that gesture, and that would not cost very much. Let us assume that my hon. Friend the Minister is correct in saying that, in this instance, that would lead to the imposition of penal interest charges. We are talking about only £18 million, so the penal interest would not be very high, but the gesture would demonstrate to everyone in this country — farmers, those who want extra payments from the regional fund and the multiplicity of interest groups that are ganged up behind increased expenditure in the EEC—that the Government are serious on this issue.
In the face of that, the Government have said that they have received expert legal advice. They do not want to tell us what that legal advice is and they will not be too specific about it. They do not mind junior Ministers coming before a Select Committee and having a disagreeable time for a couple of hours, but they will not condescend to particularities about that. All that the Government want us to know is that they have jolly good legal advice and, what is more, they probably paid pretty well for it.
Be that as it may, most legal advice of that sort is a value judgment. It is a judgment about how institutions and people respond to a token gesture. We now have an

opportunity for a token gesture. The mood in this country towards the EEC is changing. In 1974 I campaigned for us to enter and remain in the EEC, but I, as well as anybody, now feel a change in mood.
In the Fontainebleau agreement, the Government, by giving a moral commitment to a further increase in the VAT contribution, while at the same time asserting that they had control over expenditure in the EEC, placed themselves in a difficult situation. If the Government come to the House time after time asking for more and yet more money, at some stage the nation will want to know why the Government did not refuse to pay what they regarded as an illegal demand. It would have been an illegal demand in respect of £18 million only, but the nation will want to know why the Government did not have the guts on this one occasion to say, enough is enough.
We are not really talking about legal advice. Rather, it is a matter of the Government's desire on all occasions to be seen as Communautaire, to go along with the consensus in Europe. The consensus in Europe, like the consensus within the interest groups in the member states, is towards increased expenditure. That uncontrolled expenditure is deeply damaging to those who hope that this country will continue to remain in the EEC.

Mr. Robert Harvey: Today's debate goes to the heart of the European issue. Many would argue against giving greater powers to the European Parliament as it encroaches upon the sovereignty of our country. That argument comes from the so-called internationalists on the Labour Benches and from those Conservative Members who argue that Britain's sovereignty is being eroded by the EEC.
It ill suits those who criticise the EEC for being remote and bureaucratic to be against the proposed expenditure, except on the narrow legal grounds touched upon in the debate. The elected EEC Parliament has amended a budget proposal from the Commission that would absurdly have made Portugal and Spain net contributors to the Community — Portugal being one of the poorest countries in the EEC. If that had not been corrected, if the Parliament had failed to exercise the proper scrutiny over the EEC budget, there would be no control over the Commission's proposals—and in Strasbourg I witnessed the deliberations as the Parliament went line by line, page by page, through a great volume of EEC budget proposals — other than the control exercised in these debates by hon. Members. With the best will in the world, that cannot be classified as detailed or even detailed scrutiny.

Mr. Spearing: I appreciate the hon. Gentleman's point, but does he agree that one of the anomalies is that the Assembly, while having some powers—now under argument — of increasing expenditure, has as yet no powers of taxation? If it were to have both, there would be a unitary state. If the Assembly is to have some power, does the hon. Gentleman agree that it should, as the House did during the 1780s, combine these powers? There is no way out of the conundrum that the hon. Gentleman is proposing.

Mr. Harvey: I accept the hon. Gentleman's point, but there are some hon. Members, and I am one, who believe in the principle of no taxation without representation. If


the European Parliament can continue to extend its financial control over the EEC budget, that will be a step towards greater accountability and representation.
If the anti-Marketeers were heeded, there would be more power for the Commission and the bureaucrats and less power for the elected representatives of the people of this country. Let us remember that the elected Members of the European Parliament sit as representatives for the people of this country.
The nitpicking, small-minded, critical tone of EEC debates is sometimes sad to witness. Strengthening the European Parliament is another crucial step on the road towards greater European integration. In 1945 the second great war of this century came to an end. Less than 30 years later, all the main European countries which fought that war, on the Continent that shaped the rest of the world, were joined in a Community which banished for ever war between them.
That was a political miracle of astonishing dimensions. For a decade, however, little else has happened. The Community has expanded and become a formidable trading block but progress towards the accountability of its institutions — that is what is enshrined by the move towards budgetary accountability in the Parliament, and towards political union—has moved at a snail's pace.
To most people, Europe represents the stuff of today's debate. The Community is steeped in obscure financial haggling and there is constant fire from hon. Members on both sides of the House who argue that it is wasting our resources and usurping our national sovereignty. They do not realise that Britain's real sovereignty, our say in determining our own destiny, has already been usurped by the bigger political and economic powers in today's world. European co-operation is the only way of regaining a say in the major issues that affect us all.

Mr. Dykes: I agree with my hon. Friend. Is it not really sad to reflect that the only places where such absurd debates still occur are in this country, in Demark in its slightly eccentric way, particularly given the recent resolution in its Parliament, and in Greece which is very esoteric and bloody-minded anyway?

Mr. Harvey: I agree wholeheartedly with my hon. Friend, although for safety's sake I shall not associate myself with his remarks about the Greeks.
For 10 years, we have seen Europe ignored as a priority and degenerate into a series of annual bazaars for the allocation of EEC resources, coupled with well-meaning but always frustrated calls for the reform of the Community budget. The wider issues on which Europe can and should be making its voice heard are forgotten. On each of those wider issues there are 12 faint EEC voices—not one strong one—all of which are lost in the roar of super-power dialogue. The only way that we can regain our sovereignty and our say on those grave issues is to act with greater unity.
Considerable effort has been made to find a common European view on the Arab-Israeli conflict. Those efforts are to be applauded. How much more important is it that a common position be adopted on the greatest issue facing the Continent since the cold war began — that of controlling the arms race before it enters a new, dangerous and vastly expensive phase. Today, the Russian fear of the American strategic defence initiative—

Mr. Deakins: On a point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker (Sir Paul Dean): Order. I find it a little difficult to relate the remarks of the hon. Member for Clwyd, South-West (Mr. Harvey) to the Supplementary Estimate. I am sure that he will be able to relate them to the Estimate.

Mr. Harvey: I was just about to return to that matter, Mr. Deputy Speaker. The arms issue is one upon which Europe should begin to have a voice. What is Europe's position? My right hon. and learned Friend the Foreign Secretary has properly expressed his reservations about American reliance on the Maginot line in space—

Mr. Deakins: On a point of order, Mr. Deputy Speaker. I thought that you had given a ruling that in such a truncated debate the hon. Gentleman should bring his speech into line with the purpose of the debate.

Mr. Deputy Speaker: I am sure that the hon. Member for Clywd South-West will relate his remarks to the subject of the Estimate. It is a short debate.

Mr. Harvey: I shall do that, Mr. Deputy Speaker. I was about to conclude. The debate should touch upon the issue of European union. I feel that the narrow issue that we have allowed ourselves to discuss—

Mr. Thurnham: Perhaps I can help my hon. Friend return to the subject that we are discussing. He made the interesting point that part of the expenditure was necessary because Portugal, one of the poorest members of the enlarged Community, would be a net contributor. This country is now one of the poorest members of the Community and we are a contributor. Is that one of the reasons why we are so unhappy about this increased expenditure? Does not the breakdown in budgetary control go against the need for unity which I believe he said was the Common Market's greatest strength?

Mr. Harvey: I associate myself wholeheartedly with my hon. Friend's remarks. For most people, Europe is represented by the kind of detail that we have been discussing and is not seen as the uplifting ideal that it once was. I hope that it is not too late to revive the ideal of a united and respected Europe and Community whose values, civilisation and good sense exceed those of the great powers that dominate today's bipolar world and which can act as a bridge between them. In that context, I welcome recent moves towards European foreign policy co-operation.
If Europe can find a common voice in the world, economic integration and the greater accountability of EEC institutions will follow at their own pace. In the meantime, the House should vote to support the greater accountability of EEC institutions to the people's elected representatives. Let us strengthen powers of the European Parliament. Let us strengthen the cause of Europe and democratic accountability, and let us approve these Supplementary Estimates.

Mr. John Townend: I do not agree with my hon. Friend the Member for Harrow, East (Mr. Dykes) that we are discussing a narrow technical point. It is a matter of considerable principle. There are a number of


matters about the current EEC budget and the proposals before the House that I find deeply disturbing. Clearly, time will not allow me to deal with them all.
If the actions being taken in the court by the United Kingdom and the other four countries fail, the whole agreement negotiated by the United Kingdom when it approved the lifting of the VAT ceiling from 1 to 1·4 per cent. will become worthless.
Budget discipline was one of the salient points of that agreement. We were assured in the House by the Prime Minister that that agreement would give us effective budget discipline. If the Assembly's action is upheld in the court, it will drive a coach and horses through the agreement. Those of us who opposed the increases in net resources will be completely vindicated. Will my hon. Friend tell the House what contingency plans the Government have should they lose the court case? I agree with my hon. Friend the Member for Clywd, South-West (Mr. Harvey) that it is not beyond the realms of possibility that they could lose it.
I wish to deal with the so-called ex gratia payment into court. I found it disturbing to be told by my hon. Friend the Minister before the Select Committee on the Treasury and Civil Service and in the House today that he had been advised by his legal advisers that if we did not make an ex gratia payment our position in the case would be jeopardised. That is not just against the tradition of British justice; it is against natural justice.

Mr. Budgen: It may be part of European justice.

Mr. Townend: I sincerely hope not. My hon. Friend is a little cynical. The Government are implying that the court is incapable of making a fair and balanced judgment on the issue before it—whether it is a legal or an illegal budget—but will be influenced by whether this country makes an ex gratia payment in respect of what we submit is an illegal demand. If that is how European justice works, how can we ever expect fair and impartial decisions to come out of the European Court?
I should like to deal with the subject of interest. It is inconceivable to anyone brought up with the idea of equity before the courts to believe that if we make an ex gratia payment in advance and win we are not paid interest on that payment, but if we do not make a payment and lose we pay a 20 per cent. penal rate of interest. That is unjust and indefensibe.

Mr. Marlow: As I understand it, my hon. Friend is a successful business man. We have two alternatives. We believe that we are right and that we will succeed in the court. If we withhold the money and turn out to be wrong, we will have to pay the money plus the interest. That, however, is a small chance. If we believe that we are right, and we are found to be right, we shall not have paid the money. My hon. Friend is a business man. If it were his own money, which course would he take in those circumstances?

Mr. Townend: I should take the same course as my hon. Friend.

Mr. Budgen: Does my hon. Friend agree that, in view of the great sums of money involved in our contribution to the EEC, the interest on £18 million, even at 20 per

cent., is peanuts? Even if we have to pay that, if we make an effective gesture against EEC overspending it will be a small price to pay.

Mr. Townend: My hon. Friend has made a relevant point. He should remember that the total cost is not 20 per cent., because we would save the interest on the money that we would have to pay through the gilt market. The net cost would probably be only 8 per cent.
Unless my hon. Friend's reply is far more convincing than his opening speech, I, like my right hon. Friend the Member for Worthing (Mr. Higgins) will find that I cannot support the Government in the Lobby tonight.

Dr. Oonagh McDonald: On the Third Reading debate of the EC Finance Bill the then Minister of State, Treasury, the hon. Member for Eastbourne (Mr. Gow) was asked by the hon. Member for Northampton, North (Mr. Marlow) to
give a commitment to the House … that there will be no soft loans, intergovernmental agreements, whip rounds or any other form of temporary subvention to the Community".
The Minister, of course, had the sense to decline, although he did say:
provided that the budgetary discipline that has been agreed is observed … there will be no need to come back to the House for another intergovernmental agreement.
He later added:
I find it impossible to envisage circumstances in which the Government will come back to the House."—[Official Report, 22 October 1985; Vol. 84, c. 185-188.]
Neither the Minister nor we imagined this rather extraordinary set of circumstances in which the Government would come back to the House to demand a Supplementary Estimate. It is apparently designed, dare I say, to sweeten the judges so that they will judge in our favour.
One of the questions that hon. Members have rightly pursued in this debate is what is the exact nature of the European Court. The Treasury itself stated in evidence to the Treasury and Civil Service Select Committee that payment of this kind would
enable the United Kingdom to present its arguments before the Court in the most attractive light, a factor seen as an important advantage".
The Minister will have to tell us a great deal more about how he and his officials view the workings of the European Court in regard to this advance payment. The Government should tell us more about the nature of their own legal advice — they certainly have not been so coy about revealing the nature of their legal advice in the recent past. The Minister has many questions to answer.
The Minister, in his opening remarks, said that it was necessary for the United Kingdom to act in the same way as the other Council members who are also pursuing this case before the court. Why did the United Kingdom, together with the other European members of the Council, not come to a quite different view? Why did they not agree that no one should pay until the court case was settled? Surely that would have been possible by agreement. Why was that not done?
The reason for the advance payment, before the court case has been settled — as the Minister knows well, despite assurances given to the House — is that extra funds will be needed anyway. When the Minister was pressed about the possibility of withholding payment if the


judgment goes in our favour, he said that this was possible. The Minister did not say that we would be in a situation where we would withhold payments of that kind.
The Minister and the Government know that this will not be the first time that the Government will come back to the House this year and ask for more money. This £18 million is only the first request. The spokesman for the Commission, Mr. Junker, has already said that there would be a supplementary budget required during the course of 1986. When will that happen and how much will it be? The Minister and the Government cannot continue to rely on the claim that budget discipline has been achieved and that there will be no need to come back to the House.
There are two issues on which the Government might find themselves in difficulties. First, there is the question of the regional and social funds. It is true that that is non-obligatory expenditure, but the expenditure which the European Assembly added to the budget was added for two reasons. First, it was added because over 50 per cent. of the regional and social funds element of the budget refers to past commitments. That means that this year the Commission may not be able to meet promises that have already been made for payments under the heading of the regional and social funds. The second reason is that the European Assembly takes the view that agricultural spending, running at 70 per cent. of the budget, absorbs far too much of the budget.
If the regional and social funds run out of money and if we refuse to pay any additional money into the European budget we shall lose because much of that money would come to us. Have the Government thought about this problem and if so what conclusions have they reached?
The Government have refused to face up to the problems of agricultural spending. During the course of this debate it has already been stated that any fall in the dollar-ecu exchange rate below 1·2 will lead to budget increases in terms of export refund payments. A fall of 4 per cent. has already taken place this year and that means another £400 million on export refund payments alone. No agreement on cereal prices has been reached but this is not the only problem which agricultural spending faces.
In the newspapers this weekend there were reports about our food surplus, which increased by 75 per cent. to £1·4 billion last year. Inevitably that means a rise in the cost of servicing the stores of such surplus stocks. The Observer reported that the European Commission is planning to dump £4 billion worth of surplus food on to the world market over the next three years. The cost of that would be at least £2 billion. A secret European Commission report was referred to as the source—since it has already appeared in The Observer it is perhaps not all that secret. The Minister should tell us whether these reports are true. Is it true that the cost of dumping and the costs of servicing the storage of the stocks will rise in Britain and in the whole EEC to the extent of £2 billion? If so, agricultural spending will certainly run out of hand again. What will the Government do about this?
Will the Government come before the House with demands for yet more money for the worst possible reason — for the continuing, obscene food mountains and money for the practice of dumping surplus products on the world food markets, with dire consequences for Third world countries? That can only increase starvation and the difficulties that many Third world countries face.
Why will the Minister not come clean with the House and tell us that the £18 million is to be paid into the European Commission not just to make our case appear in the most attractive light but as a kind of down payment on the calls that will be made on our resources in the coming months of 1986? Why will the Government not admit that there is no such thing as budgetary discipline? Budgetary discipline does not exist because the Government have done nothing to reform agricultural policy within the Community.
If the Government persist in believing in the existence of the budgetary discipline they are the only member Government who continue to do so. The European Commission has abandoned any such behief. The Commission's annual report on agricultural spending last year made it quite clear that:
Even in those sectors in which substantial reform has already been achieved—e.g. milk products and wine—much remains to be done by way of stock reduction and supply management.
That is a polite way of saying that the reforms have done nothing to reduce agricultural spending, but rattier it will get out of hand, as it has with cereals.
The £18 million is only the first instalment. It is a sweetener to the court. The Minister should tell us more about that and when he proposes to demand more money from the House for obscene and wasteful farm spending. He should come clean with the House tonight.

Mr. Brooke: With the leave of the House, I shall reply to the debate.
This has been an excellent and forceful debate. Some hon. Members have asked questions about Government policy with regard to the disputed 1986 budget, and others have been more anxious to discuss our parliamentary procedures in such a case. I shall do my best to comment on as many of the issues that have been raised as possible.
I should like to underline three fundamental points in my opening speech. First, the question at issue is nothing less than the balance of power between the European Parliament on the one hand and the Council and national Parliaments on the other. Secondly, the key to resolving the issue satisfactorily is winning the court case. Thirdly, the procedures that we have adopted for seeking parliamentary approval are those recommended by the Treasury and Civil Service Select Committee in the previous Parliament. I trust that the critics of those procedures will not overlook that fact.
I would not accuse the hon. Member for Hamilton (Mr. Robertson) of the Latin American delegate's technique of putting in the margin, "Weak point-shout," but amid his charges of humbug and pedantry he glossed lightly over the illegality that the European Parliament had committed. He either does not understand the process of budget making, or he is saying that breaking the law does not matter if the infringement is small. I am glad that the hon. Member for Walthamstow (Mr. Deakins), with a reference to ship money, issued a powerful corrective from the Opposition Back Benches. Of course it could be argued that this is the thin edge of the wedge, but the critical fact is that what the Parliament has done is illegal, and we intend to reverse that.
My right hon. Friend the Member for Worthing (Mr. Higgins) mentioned the dilemma of our having a short time, which made more difficult the handling of a complex matter. It also made more difficult the Government's


handling of the case in terms of whether a Consolidated Fund Bill could be introduced. The dilemma was serious. As for timing, the preoccupation, apart from the dislike of paying interest, is with not finding ourselves being sued for interest on a payment that we were making without prejudice and ex gratia.

Mr. Thurnham: Will my hon. Friend give way?

Mr. Brooke: I am sorry, but no. I have very little time.
As for the method, which was recommended by the Select Committee, the use of the Contingencies Fund is dictated by urgent cases. It is difficult to envisage a more urgent case or one for which the fund would be more relevant.

Mr. Higgins: My hon. Friend said that we were making the payment without prejudice. Without prejudice to what? As we understand it, we are to make a payment but cannot get it back.

Mr. Brooke: We are making it without prejudice in the sense that we are making it not under the authority of the European Communities Act 1972, but under a separate head. In paying, we are saying that we regard the demand as improper, but we need to pay it in the context of the court cases.
My right hon. Friend the Member for Worthing mentioned page 791 of "Erskine May" and overriding the limits. The payment is not obligatory under existing legislation, but nor is it ruled out, which is the critical feature, as I think my right hon. Friend implied. The Estimate is brought forward on a separate basis, but not one which requires legislation to override the 1972 Act.
The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) criticised the Council of Ministers for its responses, but, in the process, ignored the issue of budgetary discipline, and was, I fear, joined in that by my hon. Friend the Member for Harrow, East (Mr. Dykes). I was grateful to my hon. Friend the Member for Southend, East (Mr. Taylor) for emphasising that the issues adduced by others as excuses for the European Parliament were simply justifications for illegality.

Mr. Teddy Taylor: My hon. Friend has kindly said that I helped him by saying that the payment was illegal. Why should we make an illegal payment which we shall not get back and which the Commission will spend for us?

Mr. Brooke: What I said, and what I thought my hon. Friend joined me on, was that the European Parliament's act was illegal.
The hon. Member for Walthamstow asked two questions. One related to section 173 of the European Community Treaty and the basis for our case. The very fact that the Parliament is not mentioned there raises the possibility of the Council's action being inadmissible. That is the basis for bringing our own case. The answer to his second question is that we could sue the Commission, and can still sue it, but there is no prospect of the Council of Ministers doing so. In that respect, we should be acting independently. The hon. Gentleman also mentioned the Assembly overspending. I would not have thought, from what he said, that none of his colleagues in the Assembly had voted against the illegal budget, but I agree that he is not responsible for them.
My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) mentioned the disagreeable time spent before the Treasury and Civil Service Select Committee. I did not think that it was disagreeable at all. I thoroughly enjoyed it and look forward to another occasion. He threw the word Communautaire at me. I suspect that it might well be an unparliamentary expression. The critical thing from the Government's point of view and in the context of the future of the Community is that we win the case. We believe that that can best be achieved by maintaining common cause among member Governments.
My hon. Friend the Member for Clwyd, South-West (Mr. Harvey) emphasised the importance to the future of Europe of winning the case. In that respect, he was joined by my hon. Friend the Member for Bridlington (Mr. Townend), although my hon. Friend the Member for Bridlington disagrees about the best way in which to win the case. The disagreement is simply one of tactics.
The hon. Member for Thurrock (Dr. McDonald) achieved the considerable feat of speaking for 10 minutes on behalf of the Opposition without referring once, as far as I am aware, to the illegality of the Parliament. She raised other issues which are relevant to the debate, but did not tackle the central one, which is the basis for the Government's action. I am happy to deny on behalf of the Government that we are bringing forward this Estimate because extra funds will be needed anyway. We are bringing the Estimate forward to assist the conduct of our case in the court and to reinforce our expectation of winning.

Dr. McDonald: Will the Minister give way?

Mr. Brooke: Not at this stage. My right hon. Friend the Member for Worthing asked why we were making the payment to support our case. We are anxious to maintain a common approach among member Governments in this nexus of cases. We do not want to pre-empt the court. As for the interim application, we are uniquely bringing forward the motion.
When I referred to high ground, my metaphor was as much military as moral. We are anxious to remain the plaintiffs in these cases, not the defendant.
In conclusion, I express the hope that right hon. and hon. Members on both sides of the House will vote in favour of the special Supplementary Estimate. The procedures for which the Government are seeking approval are those recommended by no less an authority than the Treasury and Civil Service Select Committee in the previous Parliament.
Several hon. Members have expressed surprise at the nature of the Government's legal advice, but to my memory no one has suggested—or at least no one has convinced me—that we should ignore that advice.
The balance between the Government's argument and that of some of my hon. Friends is that they believe that one act of political will in withholding payment is crucial to the future of Europe, and the Government believe that another act of political will is critical, which is acting in unison with our friends in the Community to defeat that illegality by the Parliament in the court. I ask the House—

It being Seven o'clock, MR. DEPUTY SPEAKER put the Question pursuant to the Order of the House, 31 January.

The House divided: Ayes 332, Noes 200.

Division No. 58]
[7.00 pm


AYES


Adley, Robert
Emery, Sir Peter


Alexander, Richard
Evennett, David


Alison, Rt Hon Michael
Eyre, Sir Reginald


Alton, David
Fallon, Michael


Amery, Rt Hon Julian
Fenner, Mrs Peggy


Amess, David
Finsberg, Sir Geoffrey


Ancram, Michael
Fletcher, Alexander


Arnold, Tom
Fookes, Miss Janet


Aspinwall, Jack
Forman, Nigel


Atkins, Rt Hon Sir H.
Forsyth, Michael (Stirling)


Atkins, Robert (South Ribble)
Fowler, Rt Hon Norman


Atkinson, David (B'm'th E)
Fox, Marcus


Baker, Rt Hon K. (Mole Vall'y)
Franks, Cecil


Baker, Nicholas (Dorset N)
Fraser, Peter (Angus East)


Baldry, Tony
Freeman, Roger


Banks, Robert (Harrogate)
Freud, Clement


Batiste, Spencer
Gale, Roger


Beith, A. J.
Galley, Roy


Bellingham, Henry
Gardiner, George (Reigate)


Bendall, Vivian
Gardner, Sir Edward (Fylde)


Benyon, William
Garel-Jones, Tristan


Best, Keith
Gilmour, Rt Hon Sir Ian


Bevan, David Gilroy
Glyn, Dr Alan


Biffen, Rt Hon John
Goodlad, Alastair


Biggs-Davison, Sir John
Gow, Ian


Blackburn, John
Gower, Sir Raymond


Bottomley, Peter
Grant, Sir Anthony


Bottomley, Mrs Virginia
Greenway, Harry


Bowden, A. (Brighton K'to'n)
Gregory, Conal


Bowden, Gerald (Dulwich)
Griffiths, Sir Eldon


Boyson, Dr Rhodes
Ground, Patrick


Braine, Rt Hon Sir Bernard
Grylls, Michael


Brandon-Bravo, Martin
Gummer, Rt Hon John S


Brinton, Tim
Hamilton, Hon A. (Epsom)


Brooke, Hon Peter
Hampson, Dr Keith


Browne, John
Hancock, Michael


Bruce, Malcolm
Hanley, Jeremy


Bryan, Sir Paul
Hannam, John


Buchanan-Smith, Rt Hon A.
Hargreaves, Kenneth


Buck, Sir Antony
Harris, David


Bulmer, Esmond
Harvey, Robert


Burt, Alistair
Haselhurst, Alan


Butcher, John
Hawkins, C. (High Peak)


Butler, Rt Hon Sir Adam
Hawkins, Sir Paul (N'folk SW)


Butterfill, John
Hayes, J.


Carlile, Alexander (Montg'y)
Hayhoe, Rt Hon Barney


Carlisle, Kenneth (Lincoln)
Hayward, Robert


Carlisle, Rt Hon M. (W'ton S)
Heath, Rt Hon Edward


Carttiss, Michael
Heathcoat-Amory, David


Cash, William
Heddle, John


Chalker, Mrs Lynda
Henderson, Barry


Channon, Rt Hon Paul
Heseltine, Rt Hon Michael


Chapman, Sydney
Hickmet, Richard


Chope, Christopher
Hicks, Robert


Churchill, W. S.
Hill, James


Clark, Hon A. (Plym'th S'n)
Hind, Kenneth


Clark, Dr Michael (Rochford)
Hirst, Michael


Clark, Sir W. (Croydon S)
Hogg, Hon Douglas (Gr'th'm)


Clarke, Rt Hon K. (Rushcliffe)
Holland, Sir Philip (Gedling)


Clegg, Sir Walter
Holt, Richard


Cockeram, Eric
Hordern, Sir Peter


Conway, Derek
Howard, Michael


Coombs, Simon
Howarth, Alan (Stratf'd-on-A)


Cope, John
Howell, Rt Hon D. (G'ldford)


Cormack, Patrick
Howell, Ralph (Norfolk, N)


Corrie, John
Howells, Geraint


Couchman, James
Hubbard-Miles, Peter


Critchley, Julian
Hughes, Simon (Southwark)


Crouch, David
Hunt, David (Wirral W)


Currie, Mrs Edwina
Hunt, John (Ravensbourne)


Dickens, Geoffrey
Hurd, Rt Hon Douglas


Dorrell, Stephen
Irving, Charles


Douglas-Hamilton, Lord J.
Jenkin, Rt Hon Patrick


Dunn, Robert
Jenkins, Rt Hon Roy (Hillh'd)


Durant, Tony
Johnson Smith, Sir Geoffrey


Dykes, Hugh
Johnston, Sir Russell


Edwards, Rt Hon N. (P'broke)
Jones, Gwilym (Cardiff N)


Eggar, Tim
Jones, Robert (Herts W)





Jopling, Rt Hon Michael
Pollock, Alexander


Joseph, Rt Hon Sir Keith
Portillo, Michael


Kellett-Bowman, Mrs Elaine
Powell, William (Corby)


Kershaw, Sir Anthony
Powley, John


Key, Robert
Prentice, Rt Hon Reg


King, Roger (B'ham N'field)
Price, Sir David


Knight, Greg (Derby N)
Prior, Rt Hon James


Knight, Dame Jill (Edgbaston)
Pym, Rt Hon Francis


Knowles, Michael
Raffan, Keith


Knox, David
Raison, Rt Hon Timothy


Lamont, Norman
Rathbone, Tim


Lang, Ian
Renton, Tim


Lawler, Geoffrey
Rhodes James, Robert


Lawrence, Ivan
Rhys Williams, Sir Brandon


Lawson, Rt Hon Nigel
Ridley, Rt Hon Nicholas


Lee, John (Pendle)
Ridsdale, Sir Julian


Leigh, Edward (Gainsbor'gh)
Rifkind, Rt Hon Malcolm


Lennox-Boyd, Hon Mark
Rippon, Rt Hon Geoffrey


Lewis, Sir Kenneth (Stamf'd)
Roberts, Wyn (Conwy)


Lightbown, David
Roe, Mrs Marion


Lilley, Peter
Ross, Stephen (Isle of Wight)


Lloyd, Ian (Havant)
Rossi, Sir Hugh


Lloyd, Peter (Fareham)
Rost, Peter


Lord, Michael
Rowe, Andrew


Luce, Rt Hon Richard
Rumbold, Mrs Angela


Lyell, Nicholas
Ryder, Richard


McCrindle, Robert
Sackville, Hon Thomas


McCurley, Mrs Anna
Sainsbury, Hon Timothy


Macfarlane, Neil
Sayeed, Jonathan


MacGregor, Rt Hon John
Shaw, Giles (Pudsey)


MacKay, Andrew (Berkshire)
Shaw, Sir Michael (Scarb')


MacKay, John (Argyll &amp; Bute)
Shelton, William (Streatham)


Maclean, David John
Shepherd, Colin (Hereford)


Maclennan, Robert
Silvester, Fred


McNair-Wilson, M. (N'bury)
Sims, Roger


McNair-Wilson, P. (New F'st)
Skeet, Sir Trevor


McQuarrie, Albert
Smith, Sir Dudley (Warwick)


Madel, David
Smith, Tim (Beaconsfield)


Major, John
Soames, Hon Nicholas


Malins, Humfrey
Speed, Keith


Maples, John
Speller, Tony


Marland, Paul
Spence, John


Marshall, Michael (Arundel)
Spencer, Derek


Mates, Michael
Spicer, Jim (Dorset W)


Maude, Hon Francis
Spicer, Michael (S Worcs)


Mawhinney, Dr Brian
Squire, Robin


Maxwell-Hyslop, Robin
Stanbrook, Ivor


Mayhew, Sir Patrick
Stanley, Rt Hon John


Mellor, David
Steel, Rt Hon David


Merchant, Piers
Steen, Anthony


Meyer, Sir Anthony
Stern, Michael


Mills, Iain (Meriden)
Stevens, Lewis (Nuneaton)


Mills, Sir Peter (West Devon)
Stewart, Allan (Eastwood)


Mitchell, David (Hants NW)
Stewart, Andrew (Sherwood)


Monro, Sir Hector
Stewart, Ian (Hertf'dshire N)


Montgomery, Sir Fergus
Stradling Thomas, Sir John


Moore, Rt Hon John
Tapsell, Sir Peter


Morris, M. (N'hampton S)
Taylor, John (Solihull)


Morrison, Hon C. (Devizes)
Temple-Morris, Peter


Morrison, Hon P. (Chester)
Terlezki, Stefan


Mudd, David
Thatcher, Rt Hon Mrs M.


Murphy, Christopher
Thomas, Rt Hon Peter


Neale, Gerrard
Thompson, Donald (Calder V)


Needham, Richard
Thompson, Patrick (N'ich N)


Nelson, Anthony
Thorne, Neil (Ilford S)


Neubert, Michael
Townsend, Cyril D. (B'heath)


Newton, Tony
Tracey, Richard


Nicholls, Patrick
Trippier, David


Norris, Steven
Trotter, Neville


Oppenheim, Phillip
van Straubenzee, Sir W.


Osborn, Sir John
Viggers, Peter


Ottaway, Richard
Waddington, David


Page, Sir John (Harrow W)
Wainwright, R.


Page, Richard (Herts SW)
Wakeham, Rt Hon John


Parkinson, Rt Hon Cecil
Waldegrave, Hon William


Parris, Matthew
Walden, George


Patten, Christopher (Bath)
Walker, Rt Hon P. (W'cester)


Patten, J. (Oxf W &amp; Abgdn)
Wallace, James


Pawsey, James
Waller, Gary


Percival, Rt Hon Sir Ian
Walters, Dennis






Ward, John
Wolfson, Mark


Wardle, C. (Bexhill)
Wood, Timothy


Warren, Kenneth
Woodcock, Michael


Watts, John
Yeo, Tim


Wells, Bowen (Hertford)
Young, Sir George (Acton)


Wells, Sir John (Maidstone)
Younger, Rt Hon George


Wheeler, John



Whitney, Raymond
Tellers for the Ayes:


Wiggin, Jerry
Mr. Carol Mather and


Wilkinson, John
Mr. Robert Boscawen




NOES


Aitken, Jonathan
Deakins, Eric


Anderson, Donald
Dixon, Donald


Archer, Rt Hon Peter
Dobson, Frank


Ashton, Joe
Dormand, Jack


Atkinson, N. (Tottenham)
Douglas, Dick


Bagier, Gordon A. T.
Dover, Den


Banks, Tony (Newham NW)
Dubs, Alfred


Barnett, Guy
Dunwoody, Hon Mrs G.


Barron, Kevin
Eadie, Alex


Beckett, Mrs Margaret
Eastham, Ken


Benn, Rt Hon Tony
Edwards, Bob (W'h'mpt'n SE)


Bennett, A. (Dent'n &amp; Red'sh)
Evans, John (St. Helens N)


Bermingham, Gerald
Ewing, Harry


Bidwell, Sydney
Fatchett, Derek


Blair, Anthony
Faulds, Andrew


Body, Sir Richard
Field, Frank (Birkenhead)


Boyes, Roland
Fields, T. (L'pool Broad Gn)


Bray, Dr Jeremy
Fisher, Mark


Brown, Gordon (D'f'mline E)
Flannery, Martin


Brown, Hugh D. (Proven)
Foot, Rt Hon Michael


Brown, M. (Brigg &amp; Cl'thpes)
Forrester, John


Brown, N. (N'c'tle-u-Tyne E)
Foster, Derek


Brown, R. (N'c'tle-u-Tyne N)
Foulkes, George


Brown, Ron (E'burgh, Leith)
Fraser, J. (Norwood)


Buchan, Norman
Freeson, Rt Hon Reginald


Budgen, Nick
Fry, Peter


Caborn, Richard
Garrett, W. E.


Callaghan, Rt Hon J.
George, Bruce


Callaghan, Jim (Heyw'd &amp; M)
Gilbert, Rt Hon Dr John


Campbell, Ian
Goodhart, Sir Philip


Campbell-Savours, Dale
Gould, Bryan


Carter-Jones, Lewis
Gourley, Harry


Clark, Dr David (S Shields)
Hamilton, James (M'well N)


Clarke, Thomas
Hamilton, Neil (Tatton)


Clay, Robert
Hamilton, W. W. (Fife Central)


Clelland, David Gordon
Hardy, Peter


Clwyd, Mrs Ann
Harman, Ms Harriet


Cocks, Rt Hon M. (Bristol S)
Harrison, Rt Hon Walter


Cohen, Harry
Hart, Rt Hon Dame Judith


Coleman, Donald
Hattersley, Rt Hon Roy


Conlan, Bernard
Hawksley, Warren


Cook, Frank (Stockton North)
Healey, Rt Hon Denis


Cook, Robin F. (Livingston)
Heffer, Eric S.


Corbyn, Jeremy
Hogg, N. (C'nauld &amp; Kilsyth)


Cox, Thomas (Tooting)
Holland, Stuart (Vauxhall)


Craigen, J. M.
Home Robertson, John


Crowther, Stan
Howarth, Gerald (Cannock)


Cunliffe, Lawrence
Howell, Rt Hon D. (S'heath)


Cunningham, Dr John
Hoyle, Douglas


Davies, Rt Hon Denzil (L'lli)
Hughes, Dr Mark (Durham)


Davis, Terry (B'ham, H'ge H'l)
Hughes, Robert (Aberdeen N)





Hughes, Roy (Newport East)
Powell, Rt Hon J. E.


Hughes, Sean (Knowsley S)
Powell, Raymond (Ogmore)


Janner, Hon Greville
Proctor, K. Harvey


John, Brynmor
Radice, Giles


Jones, Barry (Alyn &amp; Deeside)
Randall, Stuart


Kaufman, Rt Hon Gerald
Redmond, Martin


Kilroy-Silk, Robert
Rees, Rt Hon M. (Leeds S)


Kinnock, Rt Hon Neil
Richardson, Ms Jo


Lambie, David
Roberts, Allan (Bootle)


Lamond, James
Roberts, Ernest (Hackney N)


Leadbitter, Ted
Robertson, George


Leighton, Ronald
Robinson, G. (Coventry NW)


Lewis, Ron (Carlisle)
Rogers, Allan


Lewis, Terence (Worsley)
Rooker, J. W.


Litherland, Robert
Ross, Ernest (Dundee W)


Lloyd, Tony (Stretford)
Rowlands, Ted


Lofthouse, Geoffrey
Ryman, John


McDonald, Dr Oonagh
Sedgemore, Brian


McGuire, Michael
Sheerman, Barry


McKay, Allen (Penistone)
Sheldon, Rt Hon R.


McKelvey, William
Shepherd, Richard (Aldridge)


MacKenzie, Rt Hon Gregor
Shore, Rt Hon Peter


McNamara, Kevin
Short, Ms Clare (Ladywood)


McTaggart, Robert
Short, Mrs R.(W'hampt'n NE)


McWilliam, John
Silkin, Rt Hon J.


Madden, Max
Skinner, Dennis


Marek, Dr John
Smith, C. (Isl'ton S &amp; F'bury)


Marlow, Antony
Spearing, Nigel


Marshall, David (Shettleston)
Stott, Roger


Martin, Michael
Strang, Gavin


Maxton, John
Straw, Jack


Maynard, Miss Joan
Taylor, Teddy (S'end E)


Meacher, Michael
Thomas, Dr R. (Carmarthen)


Michie, William
Thompson, J. (Wansbeck)


Mikardo, Ian
Thorne, Stan (Preston)


Millan, Rt Hon Bruce
Tinn, James


Miller, Dr M. S. (E Kilbride)
Torney, Tom


Mitchell, Austin (G't Grimsby)
Wardell, Gareth (Gower)


Morris, Rt Hon A. (W'shawe)
Wareing, Robert


Morris, Rt Hon J. (Aberavon)
Weetch, Ken


Nellist, David
Welsh, Michael


Oakes, Rt Hon Gordon
White, James


O'Brien, William
Williams, Rt Hon A.


O'Neill, Martin
Winnick, David


Orme, Rt Hon Stanley
Winterton, Nicholas


Park, George
Woodall, Alec


Parry, Robert
Young, David (Bolton SE)


Patchett, Terry



Pavitt, Laurie
Tellers for the Noes:


Pendry, Tom
Mr. Ron Davies and


Pike, Peter
Mr. Frank Haynes.

Question accordingly agreed to.

Resolved,
That a supplementary sum, not exceeding £135,917,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1986 for expenditure by the Treasury in connection with payments to the Budget of the European Communities not covered by direct charges on the Consolidated Fund under section 2(3) of the European Communities Act 1972, as set out in House of Commons Paper No. 177.

Australia Bill [Lords]

Order for Second Reading read.

The Minister for Overseas Development (Mr. Timothy Raison): I have it in command from the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Bill, has consented to place her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar): I beg to move, That the Bill be now read a Second time.
Our relations with Australia are of the greatest importance to this country. The Bill will, when enacted, confirm the United Kingdom's recognition of Australia's present-day status as a proud and independent nation. The removal of the old residual constitutional links reflects this country's affection for Australia and is therefore a cause for satisfaction.
The Bill is at the request and with the consent of the Parliament and Government of the Commonwealth of Australia. The request and consent was expressed in the Australia (Request and Consent) Act 1985, enacted in December 1985 by the Commonwealth Parliament in Australia. That legislation came about as a result of legislation enacted in September and October 1985 by the legislatures of each Australian state. In the passage through state legislatures and the federal Parliament, there was unanimous support from all Australian political parties to the proposals. I am happy to report that the same unanimity was evident in the passage of our own Bill through another place.
The purpose of the Bill is to remove the remaining constitutional links that still exist between the United Kingdom and the Australian states. The links have their origin in the way that the Commonwealth of Australia was created in 1901 as a federation of what were, until then, individual British colonies. On federation, a number of powers and functions were conferred upon the Commonwealth authorities, but the states, as the then colonies had become, retained many of their previous powers and functions. In law, and in many respects, they retained their status as colonies of the United Kingdom. With that status they remained subject to certain restraints and controls from the United Kingdom which, with the development of Australia to independent statehood, has clearly become inappropriate.
The quasi-colonial status of the Australian states meant that, in respect of those states, Her Majesty was sovereign in right of the United Kingdom; thus, when exercising her powers in relation to the states, Her Majesty is formally advised by her United Kingdom Ministers. Under the Bill, Her Majesty will continue to be sovereign in respect of the states, but no longer in respect of the United Kingdom. Instead, the Bill provides that when Her Majesty is exercising powers and functions in respect of the states, she will do so on the advice of Australian state Premiers. This mirrors Her Majesty's position in relation to Australian Commonwealth matters when she is advised by her Australian Commonwealth Ministers. The Bill makes no other change in the position of Her Majesty as Queen of Australia.
The Australian Government's request is made in accordance with section 4 of the Statute of Westminster 1931, which states:
No Act of Parliament of the United Kingdom passed after the commencement of this Act shall extend, or be deemed to extend, to a Dominion as part of the law of that Dominion, unless it is expressly declared in that Act that that Dominion has requested, and consented to, the enactment thereof.
The details of the Bill are the result of extensive consultations between the Australian state and Commonwealth Governments and, more recently, between the Australian Commonwealth and United Kingdom Governments. Her Majesty approved the proposals in the middle of last year. Once Her Majesty had approved them, all the states and the Commonwealth of Australia passed legislation in their own legislatures. Following Royal Assent to the Australia (Request and Consent) Act 1985, passed by the Commonwealth Parliament, Mr. Hawke wrote to the Prime Minister formally seeking enactment at Westminster of complementary legislation. That is the Bill before the House.
The Bill is drafted to mirror the Australian legislation precisely. Briefly, the Bill will, in clause 1, remove the British Parliament's power to make laws for Australian states— thus it achieves the complete legislative independence of Australia from the United Kingdom. By virtue of clause 10, the Bill will terminate the responsibility of the Government of the United Kingdom for the government of any Australian state.
The Bill will also remove certain restraints which at present exist in relation to the legislative powers of Australian states. By clause 8, it will remove certain powers of Her Majesty, as the Queen of the United Kingdom, exercisable on the advice of United Kingdom Ministers, to disallow or to suspend the operation of state laws. By clause 3,it will remove certain restrictions, for example, under the Colonial Laws Validity Act 1865, on the legislative powers of Australian states.
Turning to judicial matters, clause 11 will terminate appeals to the Privy Council from state courts. However, it will not affect an appeal instituted before the commencement of this legislation, or an appeal for which leave has been given before the commencement of the Act. Those will continue to be dealt with in the same manner as before, as if this legislation had not been enacted.
As regards the powers and functions of Her Majesty and governors in respect of states, clause 7 makes new provisions. Her Majesty's representative in each state continues to be the governor. It is the governor alone who will exercise the powers of Her Majesty, except on the appointment or the termination of the appointment of a governor, and at times when the Queen is personally present in the state.
On those two matters, the Bill provides for the Queen to act on the advice of the Premier of the state concerned, although when she is personally present in a state, any such advice to the Queen would be tendered only in accordance with the mutual and prior agreement between the Queen and the Premier. That arrangement was agreed between the Australian federal and state authorities and the Palace.
Finally, in clauses 13 and 14 the Bill amends the constitution Acts of Queensland and Western Australia respectively. The constitutions of those two states are the only ones that include specific provisions relating to the appointment of their governors. The clauses are


consequential upon termination of the powers and responsibilities of United Kingdom Ministers in respect of states.
I am sure that the whole House will wish to join the Government in welcoming the Bill. It represents and embodies Australian wishes. All parties and all state legislatures in the Commonwealth Parliament support the proposals outlined in the Bill. As I said at the beginning of my speech, legislation has been enacted in all state and Commonwealth legislatures smoothly and without controversy. It is right that this House should agree to the request of the representatives of the Australian people for the removal of these residual constitutional links.
The decision to propose changes has not been made lightly. While it is true that the Bill will remove certain, largely formal, legal links, it will in no way weaken the deep practical relationship between our two countries. Moreover, it will substitute new arrangements that accurately reflect Australia's well-established status as a modern and sovereign nation. The Bill also acknowledges Australia's proud independence under its Queen and the true balance of our relationship today.
I commend the Bill to the House.

Mr. Donald Anderson: I thank the Minister for his clear and helpful speech. It is obvious that the Government have not materially altered their position since Baroness Young outlined the Bill in another place on 16 July.
In no way will the Opposition seek to delay or amend the Bill. On the contrary, we shall do everything that we can to speed its passage through the House in the hope that Her Majesty the Queen can proclaim its coming into force when she visits Australia early next month.
On one level, it would in any event be quite unrealistic for us to raise obstacles. It would be inappropriate to seek unilaterally to amend matters which have been agreed by all Australians, and which should properly be within their competence. We note the unanimous approval in Australia, the passage through the state legislatures in September and October last year and the Royal Assent in Australia on 4 December. It has been agreed by all parties in Australia, by all states—even by Western Australia, which in the 1930s had a secessionist movement—and by the Commonwealth Government—even those individuals who have been most loyal to the old Commonwealth relationship. One contrasts the reception in this House for the Bill with that for the Bill that eventually became the Canada Act.
Wih such unanimity of approval, how can we oppose the Bill? It is the recognition of a change in relationship from the time of the establishment of the Australian Commonwealth in 1901—the residual element of that quasi-colonial relationship whose very existence contains at least a chance of potential conflict between the Crown, our legislature and Australia.
Nevertheless, there were positive elements in the old relationship, especially in the co-operative development of the common law. All Bar students and civil practitioners will be aware of the distinguished Chief Justice of the Australian High Court, Sir Owen Dixon, and of the Wagon Mound case in 1961, which decisively altered the concept of liability in our civil law, defining the limits of liability

for a negligent act. All that arose from a mishap in the harbour at Sydney. The personal relationships between members of the Bar in Australia and this country will continue, and I am sure that the legal co-operation generally will also remain.
The tide has passed, and, as the Minister said, it is quite anachronistic that, for example, Her Majesty the Queen, in exercising powers in the Australian states, acts on the advice of United Kingdom Ministers. When the Bill becomes law, in exercising such functions the Queen will act on the advice of Australian state premiers. Another example of an anachronism is that this House should have certain functions in respect of legislation for the states of Australia.
There is a new reality. There is the development of two wholly independent, nations, in no way dependent the one upon the other, enjoying a warm and close bilateral relationship — two proud democracies, homes of the common law. When problems arise on a bilateral level, such as those following the McClelland commission report on nuclear tests in Australia, those potential forces of an explosive conflict will, I am confident, be settled on a basis of mutual good will and long-standing friendship.
We do not need these remaining residual quasi-colonial ties to define our relationship with Australia—something that is based on far broader and wider foundations. We have fought together, we have talked together as parliamentary colleagues in the Commonwealth Parliamentary Association and the Inter-Parliamentary Union, we mix together, we have a network of family links between this country and Australia—there can hardly be a family in the United Kingdom which does not have some personal link with Australia—and we play together.
My only slight criticism of the Bill is that our negotiators have not done a tough enough job, because there is no reciprocity. Perhaps, as a swap for giving the Australians their constitution, we should have insisted that Alan Border remain in this country for five years.
A new relationship has indeed developed. When Sir Robert Menzies used to say that he was British to his bootstraps. that was anachronistic even then, as I cannot imagine that many British people were wearing bootstraps. We now look forward to the British-Australian bicentennial celebrations to be held next year. The old is dead, long live the new relationship. At last, Australia has achieved her legislative independence.

Mr. Clement Freud: It is welcome and uplifting to take part in a debate in which both sides of the House seem united in wishing progress to a Bill. I compliment the Under-Secretary of State on giving a new definition to the term "Second Reading", in that he read for the second time what his noble Friend had read so well in another place, while inserting one or two interesting adverbs, which were recognised by the occupants of the Opposition Benches.
On behalf of my right hon. and hon. Friends, who are so much better represented proportionally in the Chamber this evening than are the Government or the official Opposition, I am pleased to say that the Bill has the full support of the Liberal and Social Democratic parties. It was anachronistic to have judicial and residual administrative rights over Australian legislation, and we welcome their termination.


Australia is a mature and civilised country which I have had the privilege and pleasure of visiting on a number of occasions. The last occasion on which I visited it was as a member of the Commonwealth Parliamentary Association. If ever there was a country which deserved to look after its own destiny without unnecessary interference from us, it is Australia.
It used to be said in olden days that one could tell the difference between an Australian and yoghurt because only one of them had culture. That is no longer so, and the arts in Australia flourish now as probably in no other Commonwealth country. The Australian cinema is enjoying a marvellously exciting new life. The Melbourne opera house is one of the architectural gems of the world, and the Australian theatre flourishes. Perhaps more important is the fact that the Australian arts are customer orientated. When I was in Melbourne, even matinees of quite heavy operas were fully attended, with people waiting for returned seats.
In sport, Australians need no interference or guidance from us. There is perhaps a moment for gloating over cricket, but in all other sports they are almost fearless. Their racing is brilliant, in that they have removed elitism from it. Spectators do not necessarily wear hats, and they are not barred from going into various enclosures by virtue of how much they have paid. The bravery and knowledge of their commentators is brilliant as well. Our BBC and ITV commentators will never commit themselves if horses finish within half a length of one another. The Australian commentators call results when they are by a whisker, and they are steadily proved right.
I observed the Australian prison service and found it to he excellent. Their rate of recidivism is very much lower than ours, and there is genuine understanding, and investment in, the well-being of prisoners. I spoke to the director of prisons in the state of Victoria, and he explained that it was the state that took away individuals' liberty and that the prison service tried to replace that with dignity.
Australian agriculture needs no help from us. The CPA delegation visited an avocado plantation in Western Australia which was irrigated by means of a computer, with one man sitting in a hut with a hydrometer measuring the dampness of the earth and spraying it where necessary.
There is oil in the north and the wine from the Hunter valley in the south can take the place of any wine in the world. The state parliaments are decently run and, unlike us, sit no more often than is necessary. The Senators are well paid and they all, as well as Members of the state Parliament, enjoy free rail travel anywhere in Australia. That is something from which we should learn.
The Bill will have an effect on the conferment of honours on Australian citizens. I am pleased to say that that was not picked up by anyone in another place, and one tries in this place to be to some extent original when debating something which began in another place. Clause 7(5) reads:
The advice to Her Majesty in relation to the exercise of the powers and functions of Her Majesty in respect of a State shall be tendered by the Premier of the State",
which means that no longer will honours have to be filtered through the Foreign and Commonwealth Office. From now on they will be recommended by the state premiers to Her Majesty, who in her capacity as the Queen of Australia will confer honours on her Australian people.
I believe that our friendship will be stronger if we allow Australia, a mature and civilised nation, to run its own ship of state. It has shown the ability to do so, and I do not believe that anything that has happened recently on our side of the ocean is likely to persuade it that when it comes to governing a country we have all the answers. I welcome the Bill, and my right hon. and hon. Friends and I will support it.

Sir Dudley Smith: I shall not indulge in a travelogue, like the hon. Member for Cambridgeshire, North-East (Mr. Freud). I found it fascinating, however, to hear about his racing experiences in Australia.
As my hon. Friend the Under-Secretary of State said in introducing this small but important Bill, it is largely a formal measure. One is tempted to ask why the formal powers have been retained for so long. A similar sort of Bill came before us a short while ago that dealt with Canada. I do not know of the intricacies that lie behind such measures, but perhaps we should have proceeded jointly instead of taking a piecemeal approach. One of the most comforting and heartening features of the debate is the complete agreement on this measure that has been expressed from both Front Benches. It is comforting and heartening also to know that the Bill is in accord with the thinking of the separate states in Australia. That must be good.
I detect that everyone in this place believes that it is essential to retain full links with the Commonwealth, especially with the old Commonwealth. Our ties with Australia remain strong and they are not to be underestimated. Nor are they to be neglected. It must be understood that they should never be taken for granted. There have been suggestions in the past on the part of Australia that it should break from us while still retaining a loose association within the Commonwealth. Having been to Australia, like the hon. Member for Cambridgeshire, North-East, I detect an enormous amount of good will among Australians; that is evidenced by the many young people who come to Britain from Australia. Many of the younger generation still regard Britain as their motherland.
The ties that we are debating are anachronistic and they serve no useful purpose. It is right that the statute book should not be littered with laws that no one has any intention of implementing. Therefore, it is wise that we should be taking the step that is marked by the Bill. Wherever I go—I am sure that this will be echoed by all hon. Members—I find that there remains enormous goodwill between Australia and Britain. I am a member of the British delegation to the Council of Europe and it is interesting that among the most regular visitors from parliaments outside Europe are those who come from Australia. It is usual for Australia to send a strong team to Strasbourg about once a year to participate in debates and to make contact with European parliamentarians of the 21 nations which form the Council of Europe. That is all to the good, and we should do everything we can to encourage it.
Australia has enormous potential. It has a tiny population compared with its land mass. Long after our time it will be much further developed than it is today and with a larger population, when certain climatic barriers have been broken. Australia is a formidable and essential


part of the Commonwealth. The Bill has a great deal to commend it, not least because it gives us an opportunity to emphasise the strength of our ties with Australia.

Mr. Bruce George: In 1982 the Daily Telegraph carried a story written by Nicholas Comfort, a perceptive analyst, in which he said:
Politicians at Westminster are bracing themselves for a Bill to make changes in the Australian Constitution, in the hope that it will arouse less controversy than last winter's debates on Canada's.
About that time I opened a file on Australia, and four years later the file is thin because the contrast between the Australia Bill and the Canada Bill is enormous. I suspect that Australian politicians, seeing how badly the issue of patriating Canada's constitution was handled by the Canadian Federal Government, resolved to ensure that when, eventually, legislation was introduced for Australia, it would not be subjected to the same intense debates.
If the public was asked whether it appreciated that Britain still had a residual responsibility for Australia, many people would be as bemused as hon. Members were in the late 1980's when it was pointed out that we had a significant residual responsibility for Canada.

Mr. Robin Maxwell-Hyslop: The hon. Gentleman is more than five years out on his dates. We legislated for Canada in the 1980's.

Mr. George: If the hon. Gentleman reads Hansard he will see that I said that the issue surfaced in the late 1970s. In 1979 I presented a lobby of 250 Canadian aboriginals. The Canadian issue scarred Canadians and the parliamentarians involved. Fortunately, the House is not being put through the same traumas with Australia. Australian politicians realised that they should not go through that process and did what Canadian politicians did not do, which was to secure compliance among all the federating elements in the Australian political system and all political parties, so that there was unaminity in presenting the legislation.
The contrast is startling. The Canadian Prime Minister sought not simply to patriate the constitution, but to alter the balance between federal and provincial Governments. That caused considerble opposition in both Canada and the United Kingdom, and resulted in long hours of debate. Eventually the federal Government of Canada had to climb down and secure a different agreement with the provinces. The Australian position is very different. Although some of the characters involved in the debate five years ago are present today, the circumstances are completely different.
There was a time when such a debate would not be automatically peaceful, as clearly it will be today. The precursor to today's legislation may have been the traumas of the mid-1970s which involved the Governor-General and the dismissal of the Government of Gough Whitlam. Fortunately, there has been agreement in Australia, although there is the issue of republicanism, but that matter is exclusively for Australians. This final constitutional tie is being severed, and we wish the new arrangements all good fortune.
The issue of Australian aboriginals—those who are left — will not be debated today, or in our future

debates. That is not to say that we regard the position of Australian aboriginals as something Australians can view with pride and pleasure. However, Australian aboriginals, for whatever reason, have not lobbied British parliamentarians. If they do not see any enhancement of their status through debates in the Houses of Parliament, that is up to them. But I certainly would not like it to be thought that the Australian record was any better than that of Canada, because in many respects it is worse.
The Australians have a legacy of Westminster government which they have nurtured and developed in their own unique way. Indirectly, Australia had colonies, and Australians can be proud of the political system that they have established and of the system that they have bequeathed to their former colony of Papua New Guinea. A few months ago when the Prime Minister there was defeated on a vote of no confidence, he resigned, for the second time, and took his place on the Opposition Benches. The success of that political system may be because Australia, not the United Kingdom, was the colonial power.
The number of column inches in Hansard devoted to Australia will be limited. The measure is not being subjected to intense political debate, which is welcome. I presume that the remaining stages will be as uneventful as the Second Reading because Australians have proceeded more intelligently than their fellow Commonwealth parliamentarians in North America.
The House should wish the Bill well. It has secured unanimity here and in Australia. It is right that the Australian Government have introduced the legislation, and I hope that their future political developments will be successful.

Mr. Robin Maxwell-Hyslop: During more than 25 years in the House I have seen incompetently drafted Bills causing unanticipated troubles. I do not admire those who draft Bills incompetently. The Hon. Member for Walsall, South (Mr. George) does less than justice to the institutes of learning, which he has not dignified by his presence, in believing that British people have been wholly ignorant of the constitutional position between Australia and the United Kingdom. I should have thought that every university, except for the one which he has illuminated by his academic advice, and a huge number of people were well aware of the constitutional position of the British Parliament vis-a-vis the Commonwealth of Australia.
I rise to point out that the word "Commonwealth" is understood wholly differently in Australia and in the United Kingdom. It so happens that tonight we are passing United Kingdom legislation. In the United Kingdom the word "Commonwealth" means the British Commonwealth. I notice that the hon. Members for Paisley, South (Mr. Buchan) and for Swansea, East (Mr. Anderson) are not listening. I ask for their attention, because I am not making a party political point, but am trying to ensure that when we pass the last definitive Act which affects the great Commonwealth of Australia, we get it right instead of wrong.

Mr. Anderson: Surely it is for the Government Front Bench to enlighten the hon. Gentleman. In clause 16, the interpretation clause, the Commonwealth is properly defined.

Mr. Maxwell-Hyslop: Indeed, and nit-picking lawyers would agree with the hon. Gentleman: but he would have been wiser to wait until I had finished before making such inappropriate observations. My reading of the Bill has also reached clause 16. In fact, I have reached later in clause 16 than has the hon. Gentleman, to where it says:
'State' means a State of the Commonwealth and includes a new State".
I suppose that when we were all at primary school we knew the silly games, which were not even played by parliamentary drafting lawyers, where one turns to page 5, then page 17, back to page 6 and on to page 30 before one discovers what is intended.
I am making a substantial point, in that, in clause 1 "Commonwealth" is not used in the sense in which it is always used in the House, as in the Commonwealth Immigrants Act, the Commonwealth Prime Ministers' Conference and the Foreign and Commonwealth Office. It is being used in a different sense, which is wholly appropriate within the Commonwealth of Australia, but is not appropriate in United Kingdom legislation. We should not have to wait until clause 16 to discover that the sense in which the incompetent draftsman of the Bill used the word "Commonwealth" in clause 1 is not the sense in which it is normally used in the House, in another place, by our courts, in official designations, and by Her Majesty when she opens the Commonwealth Conference. It is used in the Australian internal sense meaning the "Commonwealth of Australia."
I am not making a Committee point, but I think it would have been more appropriate if the incompetent draftsman of the Bill had put "Commonwealth of Australia" in cluse 1 and had also given a definition in clause 16 reading:
'State' means a state of the Commonwealth of Australia and includes a new state.
I am putting this on record because, although courts often say that what is spoken in debate does not constitute the law, they refer to it as evidence of the will of Parliament.
We have all suffered so much from incompetently drafted legislation that I wish to use this occasion to protest against an example of it. It would have been so easy to say:
No Act of the Parliament of the United Kingdom passed after the commencement of this Act shall extend, or be deemed to extend, to the Commonwealth of Australia, to a State or to a Territory as part of the law of the Commonwealth of Australia, or of the state or of the Territory".

Mr. Anderson: rose—

Mr. Maxwell-Hyslop: Does the jack-in-the-box on the Opposition Front Bench want to intervene?

Mr. Anderson: Putting aside clause 16, do we not have a definition even before clause 1, in the title of the Bill:
An Act to give effect to a request by the Parliament and Government of the Commonwealth of Australia"?

Mr. Maxwell-Hyslop: We do not have a definition there at all. The first operative clause is clause 1. If the hon. Gentleman was a little more informed on such matters, he would know that the preamble does not constrain content. I am not a lawyer, for which I thank God frequently, and I hope successfully.

Mr, Buchan: There is an interpretation clause—clause 16, which clearly defines the Commonwealth as the "Commonwealth of Australia" and the state as being a
State of the Commonwealth and includes a new state".

Mr. Maxwell-Hyslop: That has already been referred to. If the hon. Gentleman had been listening rather than

chattering to his hon. Friend the Member for Swansea, East, he would have heard his hon. Friend make that point a short while ago.
I am saying that it is wholly unsatisfactory, shoddy and inappropriate draftmanship to have to wait until clause 16 before one discovers what should be in clause 1. I suppose that as an ex-junior Minister the hon. Member for Paisley, South feels it necessary to support incompetent draftsmanship, because he was a Minister who introduced incompetently drafted Bills to the House. If he had listened to what has been going on, he would have been apprised of the point that I am making.
I think it is sad that an important Bill, which brings a wholly relevant and deserved dignity to the Commonwealth of Australia, should be sullied by such mean lawyers' drafting, which does not say what it means. One should be able to read a Bill and know what it means as one goes through it, instead of having to play the silly game of referring from one clause and one part of a clause to another until one understands.
My appeal is for clear and competent drafting of Bills rather than such incompetence, which is only just legally complete, but is not what it could have been or should have been. That is the point I wish to place on record. If the Bill should be tested, as it could be in the British court. an Australian court or, in cases of conflict of jurisdiction, in any other court in the world, I would prefer to have a simple and what should be dignified measure stating clearly what it does instead of starting with avoidable ambiguities without explanation until clause 16.I think that the protest ought to be made even on this occasion, and I assure my hon. Friend the Under-Secretary of State that I shall continue to make such protests if he employs the same draftsmen for future Bills.

Mr. Eggar: With the leave of the House, l shall respond briefly to the points that were made in the debate.
The Government are delighted that the Bill has received widespread support throughout the House and I am sure that that shows the close relationship that exists between the United Kingdom and the Commonwealth of Australia.
The hon. Member for Swansea, East (Mr. Anderson) drew attention to that close relationship and in that respect he particularly mentioned the conversations that have been taking place about the Royal Commission set up by Australia to look into nuclear tests. As I think the hon. Gentleman knows, there were some helpful discussions between Senator Gareth Evans, the Australian Minister who is responsible for the matter, and my right hon. and hon. Friends, at the end of last month. He probably also knows that the United Kingdom has accepted the Australian invitation to participate in a technical assessment group. We have also agreed to be represented on a consultative group, which will examine the issues raised by the Royal Commission.
The hon. Member for Cambridgeshire, North-East (Mr. Freud) also supported the Bill. I am sure that the Australians will be thrilled to have his imprimatur of their artistic endeavours. I am not so convinced that they will welcome his preoccupation with racing, wine and prisons, which is not exactly the image that they would wish to project of their country. However, I know that everything he said was said in a positive spirit.


The hon. Member for Swansea, East suggested that we might have to have Alan Border back. I think that, in fairness to the Australians and the present poor state of their cricket, we might let them keep him.
The hon. Member for Cambridgeshire, North-East drew attention to the honours system and the way in which the Bill will change it. I confirm his impression. To complement the new legislation, it has been agreed by all concerned, including Her Majesty the Queen, that in future all honours recommendations will be made direct to the Queen by state Premiers.
My hon. Friend the Member for Warwick and Leamington (Sir D. Smith) rightly welcomed the Bill, and correctly referred to the anachronistic elements. The hon. Member for Walsall, South (Mr. George) drew attention to the differences between the Canada Bill and the Australia Bill. I well remember the role that he played in the Canada Bill. He mentioned that nothing had been said about the Bill to hon. Members by aborigines in Australia. That is correct. We understand that no representations were made by aborigines to any of the state legislatures or the Commonwealth of Australia legislature during the passage of the Bill.
I refer to the point made by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). The whole House is always impressed by his grasp of detail and by the way in which he regularly draws attention to the importance of the drafting of parliamentary Bills. I should like to consider the points that he made, but as Opposition Members said, there is a reference in the long title of the Bill and in the preamble to the Commonwealth of Australia. The Bill is taken directly from the wording adopted by the Commonwealth of Australia Parliament. It is an exact replica of that Bill. Therefore, any amendment that we sought to make to the Bill in the House would have to be returned to the Parliament of the Commonwealth, and probably to the state legislatures as well. I am sure that we would wish to avoid that if at all possible.

Mr. Maxwell-Hyslop: Has my hon. Friend really been advised that to use the phrase "Commonwealth of Australia" in our legislation to make explicit what is internally explicit in Australia would have to be returned to Australia, when there is no change in meaning whatever? He knows the answer as well as I do. If my hon. Friend is trying to persuade the House of Commons of

that, does he honestly believe it himself? The Bill is not like the Canada Bill. Its substance was affirmed by a foregoing Canadian enactment. This Bill will be an individual Act of the United Kingdom Parliament. Does my hon. Friend believe what he is saying?

Mr. Eggar: I hope that my hon. Friend will not do me an injustice. Of course I believe what I am saying. I said that I would consider carefully the point that he made. He was courteous enough to tell me earlier that he was likely to make it. I had to point out to my hon. Friend that there was a complication. I did not make any assertion as to whether his point would apply, when I said that any change that we made in the House would have to be referred to the Parliament in Canberra. I wanted to register that point. I was not using it as a definitive argument, nor would my hon. Friends expect me to do that because the Committee stage is still to come.
As all hon. Members have said, the Bill is widely welcomed in all parts of the House, as it was in all state legislatures and throughout Australia. The severance of the residual constitutional link that the Bill represents in no way weakens the deep practical bonds between our two countries. Those bonds are based on mutual friendship, and need no legal backing. The Bill acknowledges that. I believe that all hon. Members will wish to recognise that fact, and will be pleased to assist in the removal of the anachronistic links.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House. —[Mr. Durant.]

Committee tomorrow.

Mr. Maxwell-Hyslop: On a point of order, Mr. Deputy Speaker. A committal for tomorrow means that any amendments will be starred amendments. Can you give us any guidance as to whether Mr. Speaker will be unwilling to accept amendments tomorrow, because they have not had the day's notice that is usual before Committees?

Mr. Deputy Speaker (Mr. Ernest Armstrong): The hon. Gentleman has been in the House for a long time, and he knows that "Tomorrow" does not automatically mean that the Committee stage will be taken tomorrow. In fact, we have been told that the Committee stage will be next Monday.

Museum of London Bill

Not amended (in the Standing Committee), considered.

The Minister for the Arts (Mr. Richard Luce): On a point of order, Mr. Deputy Speaker. I feel that I should at this stage explain why the proposed new clause 2, which was in my name, was withdrawn last week, and what I propose to do about it.
In Committee I undertook to consider further the need for the production of regular reports by the board of governors on the activities of the museum to be required by law. That was in response to an amendment tabled by the hon. Member for Paisley, South (Mr. Buchan). I accept the need for that additional overall statutory obligation. However, I have been advised that the new clause was hybrid and could have introduced additional and lengthy delays. I have a clear sense of obligation to the Committee. I therefore undertake that the Government will table a new clause in Committee in another place which, broadly described, will put a statutory obligation on the Secretary of State to lay regular reports before both Houses on the exercise of the board's functions. I hope that that explanation will be helpful to the House.

Mr. Norman Buchan: We understand what the Minister has said, and we are glad that he took our proposal on board. We look forward with interest to the new clause that is to be tabled. The Minister is fortunate because if he had tabled a potentially hybrid new clause in front of the hon. Member for Tiverton (Mr. Maxwell-Hyslop) we might have been here for a long time.
I should like to raise a concomitant point of order, on new clause 1. It was debated in Committee for about an hour. We were just beginning to consider the ramifications of the problem when I decided, with the approval of the Committee, that it would be more appropriate to debate such a major matter of principle on the Floor of the House. Therefore I did not put it to the vote, despite pressure from many of my hon. Friends. I thought that it would be better for the House as a whole to have a look at what has become a major matter of principle. We have learned today, from the tapes, that the number of attendances at the Victoria and Albert museum since the introduction of charging has dropped by almost half. We warned the museum at the time that that would happen. For this reason I hope, Mr. Deputy Speaker, that you will reconsider the decision about selection. It is a matter of urgent importance. The unions are keen to have an answer. No answers were given, since the questions were never put to the Committee. For these reasons, I ask that we should be allowed to discuss the new clause.

Mr. Deputy Speaker (Mr. Harold Walker): I assure the House, and the hon. Member, that Mr. Speaker had all these considerations before him. He has made the selection, and we shall proceed accordingly.

Mr. Nigel Spearing: Further to that point of order, Mr. Deputy Speaker. The selection of amendments for discussion is something of a mystery, but may I ask you whether or not new clause 1 is in order? May I take it that if it were not in order it would not be on the amendment paper?

Mr. Deputy Speaker: New clause 1 has not been selected. Mr. Speaker had before him all the

considerations which the hon. Member for Paisley, South (Mr. Buchan) very properly raised. New clause 3—Mr. Norman Buchan.

New Clause 3

DUTY OF GOVERNORS TO RETAIN OBJECTS IN COLLECTIONS

'The Board of Governors of the Museum of London shall not dispose of any of the objects in their collections.'. — [Mr. Buchan.]

Brought up, and read the First time.

Mr. Buchan: I beg to move, That the clause be read a Second time.
In the short time available it has not been possible to deploy all the arguments. However, they can be dealt with when the Bill goes to another place. I have no doubt that that will happen. I look forward with immense confidence to the Bill returning to this place after it has been passed by the House of Lords with new clause 1 added to it.
New clause 3 is a probing amendment. However, it goes further than that. We are anxious about the pressure that can be brought to bear upon the trustees and governors of museums. That is why this amendment has been tabled. We want an assurance from the Government that no objects in the Museum of London will be flogged off without the utmost consideration and care and without reference back to the Minister concerned.
8.15 pm
The Minister will appoint half the governors and trustees of the museum. A rampant and crude commercialism is the ideology and philosophy of this Government. They are cutting grants and support for the museums and thereby compelling boards of governors 10 behave in this way. Furthermore, because of the nature of certain appointments, action is taken that is in line with crude commercialism, instigated by the philosophy of the Prime Minister and this Government.
I have been very disturbed by what happened at the National Museum of Wales. There has been a great deal of correspondence about it, including a report in The Guardian. The keeper of the National Museum of Wales accepted an offer from a body called Brains Trust Incorporated to transfer to Japan one of the finest and best collections of impressionist paintings outside any capital city in Europe. It is an even better collection than the Glasgow collection, which is one of the most important of the provincial collections. Brains Trust Incorporated offered £250,000—although later evidence suggests that it offered £140,000—for the whole collection. It meant that the people of Wales would be deprived of the collection for a year while it was sent on exhibition to Japan. It would not have formed part of an educational tour, involving the British Council. The collection was to be shown inside a department store. It was a further extension of commercialism—the use of impressionist paintings to attract customers into a department store.

Mr. Clement Freud: Does the hon. Gentleman accept that the exhibition was to be situated not only in a department store but in a distant corner of the top floor of that department store so that people would have to walk all over the store before they came to the art treasures?

Mr. Buchan: I understand that that was so. It is like one of those puzzles where one has to work oneself through to the end until one comes to the French impressionists, courtesy of Brains Trust Incorporated.

Mr. Alan Howarth: Before the hon. Gentleman leaves his point about the Japanese department store, is he aware that Japanese department stores play a lively part in the patronage of the arts, particularly the patronage of living artists?

Mr. Buchan: That is quite true. When they can afford to pay this kind of money they have good reasons for doing so. However, without let or hindrance this collection of extremely valuable paintings went to Japan without the benefit of proper curatorial care. We do not want that to happen to the Museum of London's collections. We want to ensure that if it is the wish of the governors to lend any part of the museum's collections it should be done on a reciprocal basis. That has always been the case with art collections. We want the Minister to assure us that what has happened in Wales and elsewhere will not be allowed to happen to the collections in the Museum of London.

Mr. Alan Howarth: The hon. Member for Paisley, South (Mr. Buchan) believes, it seems, that museums should never dispose of any of the objects in their collections. He has referred to his apprehension about the Government's rampant commercialism. I am apprehensive about the rampant reaction of the hon. Member for Paisley, South. He is the Bourbon of the world of the arts and the heritage.
To call somebody a Bourbon in the context of the arts and the heritage is not to disparage him, as hon. Members will recognise, but my anxiety about the hon. Gentleman is that he believes that nothing should ever change.
He reminds me of Charles X of France. The point of comparison is not that, as a young man, that monarch led a life of scandalous dissipation, although that is true, but that to a very high degree he believed in tradition. That was exemplified by the proceedings at his coronation service at Rheims which ran for very many hours. It was part of the antique ritual of that ceremony that the monarch should be pricked by a golden bodkin. It is easy to imagine or to fantasise that if the day comes when the hon. Member for Paisley, South finds that he is Minister for the Arts a similar grandiose and very beautiful ceremony will be performed. Charles X prostrated himself for 12 hours during the ceremony. One can imagine the hon. Member for Newham, North-West (Mr. Banks) as his acolyte administering the puncture with the golden bodkin. One could also fantasise about the hon. Gentleman attempting to press the bodkin home a little deep. But, be that as it may, if I were to pursue that line of thought no doubt you would rule me out of order, Mr. Deputy Speaker.
However, I want to advance a serious objection to what is being proposed by the Labour party. It is the mark of all good collectors, whether private or museums, that they seek to improve the quality of their collection. It would be a mistake in the case of an important museum such as the Museum of London, which has a serious responsibility to preserve and archive material of great importance relating to the history of London, to rule that neither the directors nor the trustees should ever have the power to dispose of objects that were of trivial or minor importance and not

worthy to be in the collection. We should be prepared to advance and to be a little more open-minded in that respect.
There must, of course, be safeguards. It is important to provide that a future director should not be able to succumb to the caprices of collecting fashions and dispose of objects at his sole discretion which might, by a wider judgment and the judgment of posterity, be objects of genuine importance that should be in the collection. But one can provide against that by requiring that the trustees should have a right of ultimate decision or by some such procedure. But it would be a mistake not to provide that there should be power to dispose of objects of second-rate importance.

Mr. Freud: In that case, will the hon Gentleman accept that it would be helpful if the governors came from three different stables rather than two?

Mr. Howarth: I do not think that that is essential to the point of principle that I am trying to establish. For example, in America it is a much more widely accepted practice that museums should be free to dispose of minor objects. That is one reason—among many others—why the quality of collections in many American museums and galleries has been enhanced over the years. I do not want to debar that possibility from the Museum of London.
Finally, it is curious that Opposition Members, who are rightly anxious that more funding should be available to our museums and galleries, should want to preclude one minor, but none the less not insignificant, source of possible additional funding.

Mr. Tony Banks: The hon. Member for Stratford-on-Avon (Mr. Howarth) told us in his concluding sentence all that we wanted to know in defence of the new clause. One would expect an hon. Member representing the constituency that the hon. Gentleman does to introduce into his speech so many literary and historial references. I can assure him that the people of Newham, North-West have still not finished talking about the coronation ceremony of Charles X.
The hon. Gentleman's last sentence lies behind this new clause. He said that there is this one way of raising money — renting out exhibits to other countries. I am completely in favour, as are all my hon. Friends, of the interchange of exhibits between museums internationally. One would want to see that happen. My hon. Friend the Member for Paisley, South (Mr. Buchan) referred to the National Museum of Wales, and we have the feeling that that museum did what it did at precisely that time in order to raise funds because there was a great shortage within its budget. Therefore, its reason was not the high-flown one that we would support. Instead, it was done on a straightforward commercial consideration.
The Opposition have said consistently in Committee and on other occasions that we can see the time coming when the Government, in attempting to cut public expenditure as they have attempted to do unsuccessfully for years, will look to the soft underbelly of the arts, the museums and library services in order to try to make some token savings, forcing those arts institutions into the market place in a way that is conducive neither to the interests of the museums nor to the interests of the consumer—the public who pay through their rates and taxes for the museums and art galleries to be maintained.


Just as we saw the National Museum of Wales accepting a pretty measly amount of money for the cream of its exhibits for a year, we can see in the figures that have been released tonight from the Victoria and Albert that it has been forced into introducing a scheme for voluntary admission charges, not because, as one understands from the director of the Victoria and Albert, they want to do it as a matter of principle, but because they have been forced to do it through not having sufficient funds for the museum's activities.
The Minister might say that we are being somewhat alarmist, but it is our duty to look to the future. After all, the future is with us, not with the Conservative party. We are worried that in the short time before a Labour Government are restored and my hon. Friend the Member for Paisley, South is gracing the Government Front Bench as the new Minister for the Arts, perhaps museums will start selling off some of their exhibits in order to raise cash because the Government have squeezed them.
Those are the reasons for the new clause, and I commend it to the House.

Mr. Jeremy Hanley: I must speak on this new clause because it is rubbish. It is greater rubbish than any new clause or amendment that was tabled in Committee. Not only is it nonsense, but it does not even mean what Labour Members intend it to mean. It says that the museum shall not dispose of any of the objects in its collection. Surely, if a person rents out an item he retains ownership of that item, while losing possession temporarily. Therefore, the clause would not debar anybody from renting out property.
Secondly, I wonder just how sterile it is to fetter directors of the new Museum of London right from the start in not being able to dispose of certain objects on display. Not all the objects are ancient artefacts. Some are models which the museum might want to sell to schools for educational purposes or to other museums to demonstrate the history of London.
Thirdly, I wonder whether the new clause is consistent with the Labour party's policy on museums. If the British Museum were to transfer the Elgin marbles to the Museum of London, the Museum of London would not be able to sell the Elgin marbles. If this new clause were to apply to the British Museum, the Elgin marbles could not be returned, which I believe is the Labour party's policy. For those three reasons the new clause is nonsense and I beg the House to reject it.

Mr. Spearing: A few weeks ago I too might have thought that the new clause was otiose or went too far by way of safeguard. But I do not feel that today after having sat in Committee and knowing a little of the extent to which the Government and their representatives and nominees are going in respect of Britain's assets.
The hon. Member for Richmond and Barnes (Mr. Hanley) spoke of the Elgin marbles. They are not Britain's assets; they are the assets of Greece. We know that there has been some discussion about their future. Almost by definition
any of the objects in their collection"—
presumably, at the time that Royal Assent is obtained—relates specifically to London. That is the difference between this museum and the British Museum or the National Museum of Wales.
Therefore, by definition, if anything at all is to be sold it will be sold to either a London organisation for storage

or display inside London—the Inner London education authority has been mentioned—or it will be sold outside London altogether. That, almost by definition, would be undesirable, or at least there would have to be a strong case for so doing in terms of sale rather than by loan or overseas exhibit.
Unfortunately, the members of the governing body who would take such decisions will be nominees of the Prime Minister of the day. I do not know how long the present Prime Minister will stay in her position—there have been a number of varying estimates in the past day or two —or who her successor might be, or whether there will be a Tory successor. The other governors will be nominees of the City of London. We have been over this in Committee but I say again that such a board of governors would not enjoy the same confidence of a Labour Government as would the existing board of governors.
8.30 pm
A few weeks ago, one might have said that any reasonable person would not be irresponsible in selling off artefacts or exhibition material from London, for example from some useful and interesting exhibit of the 1930s. The London museum has a 1930s shop —a Boots or a Woolworth—which is well laid out.
The Government are selling off all sorts of national assets. Who would have believed even two years ago that a Government would tell the House that they were expecting to dispose of Land. Rover? If the Government can do that, their nominees can act irresponsibly towards the objects that have been collected to represent London.

Mr. Luce: My hon. Friend the Member for Stratford-on-Avon (Mr. Howarth), at an early stage, asked us to use our imaginations to the full, and he discussed issues such as the coronation of Charles X. Tempted though I am, I shall not be drawn into this exciting debate. In the second part of his speech my hon. Friend made the important point, which was backed by my hon. Friend the Member for Richmond and Barnes (Mr. Hanley), that we should not fetter the museum. We should not allow the total immobility in the movement of objects of art between museums that the clause would bring about. It says:
The Board of Governors of the Museum of London shall not dispose of any of the objects in their collections.
Therefore, it is extremely restrictive. It would be wrong and impracticable for an institution such as the Museum of London to have such a clause imposed upon it.
The existing Museum of London Act 1965 has in section 5 a thoughtful and carefully drafted provision, which gives adequate safeguards and provides a sensible flexibility to the board of governors. The 1965 Act allows the board to dispose of objects, but only if the object is a duplicate or if it is not, in the opinion of the board, required for retention in the collection. It goes on to say that at least two thirds of the members of the board of governors must approve of any disposal before it takes place. It makes other safeguards for objects vested in the board under particular trust conditions.
We can count on the board to maintain and enhance the museum's collection, to present a picture of London's history that is as complete and representative as possible. That is one of its main aims, but the 1965 Act rightly allows for a little manoeuvre o dispose of duplicates and certain other objects as well. The present law should stand.
The hon. Member for Newham, North-West (Mr. Banks) suggested, at least by implication, that the


Government were likely to starve museums of funds. It has now been confirmed that the City Corporation will match our contribution of £2·25 million to the museum, and therefore there will now be a 10 per cent. increase in the budget for the coming financial year. There could not be a better sign of our commitment to the museum. There is no question but that we shall continue basic funding. There is that assurance.
The law has worked perfectly well under the 1965 Act, which has been in operation for 10 years. With the criteria about the disposal of objects of art, it has worked successfully. I see no reason why we should change the present rules. It would be wrong to impose immobility on the movements of objects of art, which is what the new clause proposes. It is better to have the existing safeguard under the board of governors, which is in an appropriate position to make sensible judgments. I ask the House to reject the new clause.

Mr. Buchan: I must express my intense disappointment at the extraordinary way in which the probing amendment has been received. I had thought that the Minister would immediately accept the principle that inspired the amendment and would have agreed to the House of Lords bringing in a more appropriately worded amendment. However, we are dealing with a Government that are very different from that who brought in the 1965 Act. Proper qualifications were written into the 1965 Act, but they are not qualifications with which I would trust this Government. Nor are the nominees that they will appoint necessarily the ones I would agree to.
A Labour Government brought in the 1965 Act. It says that there can be no transfer of objects unless it is approved by
not less than two-thirds of the governors for the time being.
That was at a time when the board was made up of three separately appointed thirds, but now it is a board entirely composed of Government nominees and, of all "uncommercial" bodies, the City of London. I would not trust my bodkin to such a body. There are good reasons why we put this to the "àl 'outrance", as they probably said at the time of Charles X, because we cannot trust this lot.
There is another reason for the clause. We are not saying that it is necessarily a bad thing for museums to interchange or to loan. There may even be an occasion when such a provision might extend to other sections, for example when there are duplicate copies of instruments. However, we want such movement to be rare, qualified and taken care of by a properly democratic board of governors, not one appointed by this Government.
A final reason for the new clause is that we shall be in power in two years. We are willing to have an absolute regulation, not for all time to come, but a stop placed on the actions of this Government and their board during the following two years. Given the disappointing answer, we can no longer treat this as a probing amendment but as a correct and firm amendment and a moderate assessment of the position that we are facing.

Mr. Tony Banks: Put it to the vote.

Mr. Buchan: I would do so, but I do not wish to summon up the armies of support behind this new clause. The Bill will go to another place, as Joan of Arc had to do at Rheims, so that she could deal with her acupunctured

monarch. We shall leave it to the good sense of the House of Lords. Therefore, despite pleas to the contrary, I beg to ask leave to withdraw the amendment.

Mr. Tony Banks: Take no prisoners.

Mr. Deputy Speaker (Mr. Ernest Armstrong): Is it your pleasure that the new clause be withdrawn?

Mr. Christopher Murphy: No.

Mr. Deputy Speaker: I hope that the hon. Gentleman understands that his vote must follow his voice.

Mr. Murphy: Very well.

Motion and clause, by leave, withdrawn.

Clause 1

COMPOSITION OF BOARD OF GOVERNORS

Mr. Tony Banks: I beg to move amendment No. 1, in page 1, line 7, after second 'by', insert
'the Corporation of the City of London under paragraph (b) of subsection (2) of section 1 of the Museum of London Act 1965 and'.

Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 2, in page 1, line 10 leave out from second 'date' to end of line 14 and insert
'that number of members shall be appointed by the Greater London Arts Association'.
No. 3, in page 1, line 11, leave out from 'subsection' to end of line 14 and insert
'shall be increased from six to eighteen'.
No. 4, in page 1, line 15, leave out subsection (2).

Mr. Banks: Amendments Nos.1, 3 and 4 are consequential upon each other. Their purpose is to eliminate the Corporation of the City of London from that part of the Bill which allows nomination to the museum's board of governors. The continuity of the museum's board will be broken on 1 April 1986 when, with the abolition of the GLC, that council's nominees will not longer be able to serve on the board.
In Committee the Opposition were consistent in opposing extensions of nominating rights to the City of London. On reflection, we now wish to remove the City of London entirely from the right to nominate to the board. The Bill is before the House only because of the abolition of the GLC. We would not be considering changing the board's composition were it not for the disgraceful abolition of the GLC—something on which I have spoken many times in the House and on which I shall continue to speak until citywide government in London is restored. I agree that we shall have to await the next Labour Government, but I can be patient for about two years.
In the meantime, we should bounce this matter straight back at the Government. We must say to them, "You have caused the mess in London because of an act of political vindictiveness by the Prime Minister, who personally wrote into the 1983 Tory party election manifesto the abolition of the GLC and then added the metropolitan county councils for good measure." The Government are only now realising the mess that will be left in London and elsewhere because of abolition. The Bill represents only a small part; it is not the messiest part of abolition. The provision of sewerage and waste disposal services will be a far messier consequence of GLC abolition than altering


the composition of the board of the Museum of London, but they stem from the same irresponsible, undemocratic act—the authoritarian approach of the Prime Minister, who said that, because she did not like the people who controlled the GLC, she would abolish it.
That might sound an unlikely thing for the Prime Minister to say, but I refer hon. Members to the speech made by the chairman of the Tory party—the right hon. Member for Chingford (Mr. Tebbit)—who, in his inimitably gallant and moderate way, said that because the new divisive Labour party controlled county hall, the Government would abolish the GLC. He is the only Conservative to have spoken the truth publicly about the abolition of the GLC. It was an act of political vindictiveness inspired by the Prime Minister, and this Bill is a consequence of it.
I want the Government to pick up the entire tab for the Museum of London and to give all the rights of nomination to the Prime Minister, because she caused the problem. Another reason for my wishing to do so—this is much more pleasant from the Opposition's point of view—is that the City of London has no long-term future. The next Labour Government will have to consider the structure of London local government—

Mr. Hanley: Why?

Mr. Banks: I shall tell the hon. Gentleman why. I am certain that, when the Labour Government do so, the City of London will not avoid the fate that it has dodged since the 19th century. At that time, the City of London had an opportunity to expand its limits to those of the natural London at the time, but it declined because it wished to retain its ancient rights and privileges.
I remind the House that the Herbert Commission, which reported in 1960, said that if logic had anything to do with it, it would recommend the amalgamation of the City of Westminister and the City of London; but logic had its limits and, for its purposes, the City of London lay outside them. What an amazing statement: the City of London can defy logic. It might have been able to do so until now, but it cannot defy the democratic wishes of the incoming Labour Government, and I look to that Government to do something about the City and the democratic structure of London.
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My amendments anticipate that event. We do not wish to have to introduce a Museum of London Bill in 1989 and again change the structure of the board of governors. The hon. Member for Richmond and Barnes (Mr. Hanley) asked why we wished to abolish the Corporation of the City of London. I refer him to the structure of the City, with 13,000 electors controlling the wealthiest part of London. The City retains the business vote, although it was abolished in the rest of Britain some years ago. It retains aldermen, who were abolished throughout local government elsewhere. What is more, those aldermen are elected for life. Can one imagine the uproar if I came to the House and said that GLC members should be elected for life? There is a good bunch of GLC members over there, and they deserve to hold office for life—[HON. MEMBERS: "Oh!"] Not all of them; occasionally one has to take prisoners on board, and one cannot always pick and choose the people with whom one travels. We should have met great opposition had we introduced such an undemocratic proposal. That is what happens in the City,

and that is why we do not want the City to have nominating rights to the board of governors. Central Government should accept the entire burden.
The Museum of London is not the museum of the City of London. Another reason for our objection to the corporation's power of nomination being enhanced was our fear that a museum designed for all of London would become more limited in its scope and vision because one of its major paymasters was the City of London. A concentration on the square mile would not be in the interests of Greater London as a whole, nor in the interests of the museum generally—[Interruption.] I realise that interesting meetings are occurring in the Chamber; clearly my hon. Friends are already completely convinced of the argument and need not listen to my speech. However, from the attentive faces of Conservative Members, I know that the power of my rhetoric is swaying them. They understand the basis of my argument. They realise that right is on our side in this argument, as in all others, and in that confidence I urge the amendments on the House.

Mr. Luce: I have heard the hon. Member for Newham, North-West (Mr. Banks) speak many times, but that was one of his more extraordinary speeches.
Amendments Nos.1,2 and 4 would end the appointment of governors, not only by the GLC, but by the City of London, and would allow them to be appointed by the Greater London Arts Association. Amendment No.3 suggests that those nominees should be replaced by a further 12 governors to be appointed by the Prime Minister. That is the most curious amendment, because in Committee and on the Floor of the House during the past half hour we have heard several attacks on the suggestion that my right hon. Friend the Prime Minister should be responsible for appointments to museums, yet the amendment suggests that she should have the power to appoint not just nine governors, but all 18 governors. I am delighted and interested in that suggestion. I think, however, that the Opposition ought to make up their mind on what they want my right hon. Friend the Prime Minister to do—

Mr. Banks: The right hon. Lady can do anything that she wants to do.

Mr. Luce: —about the appointment of governors.
I am delighted that the Opposition have such trust in my right hon. Friend the Prime Minister. It is excellent news that they believe my right hon. Friend would make a good range of appointments to the board. It is marvellous news that the Opposition have now changed their mind after all the discussions in the debate. At least we have managed to convert the Opposition to the wisdom of the Government's approach and my right hon. Friend the Prime Minister's sensible appointments to the board of governors.
I must rightly and firmly stick to the fundamental point that I have made throughout. It would not be sensible to divorce the appointment of governors from the funding arrangements — that is to say, 50 per cent. from the Government and 50 per cent. from the City of London. it would be sensible and consistent to stick to that approach.

Mr. Tony Banks: The corollary of what the Minister said earlier is that he should now accept the amendments. If he does not do so, it will prove that he has no faith in the Prime Minister's ability to make the right appointments.

Mr. Luce: Unlike the hon. Gentleman, who seems to be totally inconsistent so far in his contributions, I am trying to be consistent. The Government are giving 50 per cent. of the funding, and the Corporation of the City of London is giving the other 50 per cent. It makes absolute sense that each should have nine nominees out of the 18, and we should persist with that broad approach. If the City is contributing 50 per cent., it is certainly not unreasonable that it should have that role in the appointment of the governors.
I must reiterate that I have always taken seriously the important points about the Londonwide nature of the museum. That concept is built into the Bill in clause 2, which was debated to a considerable extent in Committee. I repeat what was said in Committee and during the earlier stages of the Bill, that in making these appointments to the board of governors my right hon. Friend the Prime Minister and the City of London Corporation will take full account of the Londonwide nature of the museum.
I wholly and utterly reject the attack made by the hon. Member for Newham, North-West on the City and his claims that the City is unsuitable as a body to make these nominations. I must tell the House that the corporation has a long and distinguished tradition of serving Greater London and the surrounding area. We should remind ourselves that the City Corporation established the Guildhall museum, which was a forerunner of the Museum of London. The corporation has played a major part in the creation of the Museum of London. I ask the House to reject the amendments.

Mr. Buchan: The Opposition cannot get reason through to the Government. The whole point is that since this mess was created by the Government and the Prime Minister, the sensible thing is to let them get on with it for a couple of years, not involve the City of London with all the problems: leave it to the Government.
The Opposition have made every attempt to secure some democratic representative content in the governing body. We do not regard appointment by the Prime Minister and the Government as particularly democratic, and it is certainly not representative. We do not regard the City of London as democratic or representative. For that reason we tried different methods, successive bodies, a combination of the boroughs, the question of ILEA and so on. It seemed to us that at least the Greater London Arts Association has concern for the arts—and there is no guarantee that the Prime Minister or City of London nominees would have that—and that was one final, modest attempt to get the matter resolved.

Mr. Spearing: Does my hon. Friend recall that the City Corporation and the City fathers, for centuries no doubt, have received great benefit from the existence of the Sadler's Wells theatre? The Prime Minister and some of her colleagues seem to have reneged on that understanding. Perhaps there is more sense in this than the Minister might think.

Mr. Buchan: My hon. Friend is trying to make a comparison and seeking to find someone who is better than the present Government.

Mr. Tony Banks: Anyone is better than the present Government.

Mr. Buchan: I was about to say that. That is an easy comparison, and is one that I accept.
Who would have thought that after 300 years of theatrical history a nationally and internationally renowned body may now have to close its doors because of the stupid malevolence of the Government in abolishing the GLC? That particularly foolish act has affected Sadler's Wells and the Arts Council which will have difficulties as it has been completely under-funded. I hope that the Minister will take back to the Prime Minister the point that is being made in our concern about the Museum of London. We are concerned about the wider arts.

Mr. Hanley: In his closing remarks, will the hon. Gentleman say why he has been so dissatisfied with the appointments of the City of London corporation, and with which of the current members of the board he is dissatisfied? I believe that the directors who have been appointed so far, have carried out their tasks admirably in the interests of all the citizens of this country and especially of Londoners. Will he explain why he wants to remove the power which has been so wisely exercised by the City of London Corporation?

Mr. Buchan: The hon. Gentleman must do me no wrong on that point. I have never, at any point, attacked any member so far appointed by the City of London. The Opposition have criticised the City of London and disputed the suggestion that it is the appropriate body to make such appointments. Above all, we have disputed the suggestion that its power in relation to the board should be increased. We have no doubts about that but I made no criticism of present members, despite the actions of the Government.
The only advice I would give to whatever directors are appointed, is that they should not write any solicitors' letters and, above all, they should not go near the Solicitor-General while this Government are in power.
We have made every attempt to get a proper solution to the representation on this body and no doubt we shall return to it later.

Mr. Tony Banks: The Opposition have been consistent throughout about the City of London. There has been no criticism of any governors, either those appointed by the City of London or by the Greater London council. I still hope that when the Minister announces the names of the new governors, he will bear in mind the service and contribution of a number of the GLC nominees, who have been drawn from across the parties, to the success of the Museum of London.
This is a matter of principle. The Opposition have opposed the extension of powers for the City in terms of nominating rights because we do not believe that, in local government terms, the City of London is the correct and democratic institution to have such powers.
I have many personal friends within the City of London. In my term of office as chairman of the Greater London council, which still has some weeks yet to run, I have had many courteous exchanges with past and present Lord Mayors of London, and very charming and pleasant people they are. But I stress that this is a matter of principle not a personal matter. The reason behind the Opposition amendments about the City is that we want to minimise the disruption to the composition of the governing body by the City of London. It is the full, firm and stated intention of the Labour party when it is returned to power in a couple of years time, to deal with the City of London. There will


not be abolition in the crude sense; rather I trust it will be through the incorporation of the City of London into the surrounding boroughs.
County hall may well have been sold as a hotel or supermarket or for some other obscene purpose promoted by the London Residuary Body supported by the Government. We might have to transfer the government of London to the Guildhall and the Mansion house. I look forward to a new Lord Mayor of London who will represent all Londoners and not just the 13,000 residents within the square mile.
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When that day comes and I, as the last chairman of the GLC, greet the new Lord Mayor in the Mansion house, I shall be able to say, "We tried in 1986 to stop further disruption of the Museum of London governing bodies, but it looks as though we failed." That is one of the consequences of the incorporation of the City of London. We are merely trying to anticipate what will happen in two years' time. Clearly, the Minister does not want to take the opportunity to look into the future.

Amendment negatived.

Mr. Buchan: On a point of order, Mr. Deputy Speaker. No one said no.

Mr. Deputy Speaker: I heard the Minister say no.

Mr. Buchan: I am glad that your hearing is better than ours, Mr. Deputy Speaker.

Clause 2

FUNCTIONS OF BOARD OF GOVERNORS

Mr. Luce: I beg to move amendment No. 6, in page 2, line 39, at end insert
'publish information concerning such investigations and research'.

Mr. Deputy Speaker: With this it will be convenient to consider Government amendments Nos.7, 8,13 and 14.

Mr. Luce: Mr. Deputy Speaker, you suggested that we should sensibly take these amendments as a group because each one flows from the other.
The purpose of amendment No.6 is to make it clear that the Museum of London or any other body or person in conjunction with whom it may be working in connection with the provision of archaeological services in London may publish information deriving from archaeological investigations and research.
I gave undertakings in Committee to consider an amendment along those lines. The amendment follows the spirit of the amendment tabled by Opposition Members. However, the wording of their amendment was not sufficiently clear and did not sit easily with the Bill's existing wording. There are three points. The first is that we have detached publications from the non-specific powers to provide and promote archaeological services. Secondly, we have linked the power to publish to the result of the specific investigation and research being carried out under the terms of the Bill. Thirdly, the wording follows the pattern of similar provisions in existing legislation.
As I explained to the Committee, I did not believe that the amendment was strictly necessary, but there are precedents in the London Government Act 1963 and the

Ancient Monuments and Archaeological Areas Act 1979. I must be fair to the hon. Member for Newham, North-West (Mr. Banks) who said in Committee:
excavation is not completed until it is published".—[Official Report, Standing Committee E, 21 January 1986, c. 101.]
I agree with that. I should not wish there to be any doubt about the powers to publish information under the Bill. For that reason, I commend the amendment to the House.

Mr. Buchan: It would be ungracious of me not to thank the Minister. He promised to table an amendment after our open and broad discussion in Committee. I thank him for bringing it forward so expeditiously.
Amendment agreed to.
Amendments made: No. 7, in page 2, line 41, leave out `and'.
No. 8, in page 42, after 'research', insert
'and the publishing of such information'.—[Mr. Luce.]

Mr. Spearing: I beg to move amendment No. 9, in page 3, leave out lines 1 to 6.

Mr. Speaker: With this it will be convenient to take the following amendments: No.10, in page 3, line 3, after 'State', insert
'and he shall not give such consent unless he has satisfied himself that the acquisition or disposal will facilitate the exercise of their functions by the Board of Governors and that the acquisition or disposal is in the best interests of Greater London generally'.
No. 11, in page 3, line 5, leave out 'and the Corporation'.

Mr. Spearing: The amendment excludes part of the compound, complex clause 2 which does a number of things. The amendment would delete clause 2(4) which provides:
(4) The Board shall not acquire or dispose of any land or any estate or interest in land without the consent of the Secretary of State and the Corporation and such consent may be given subject to such conditions as the Secretary of State and the Corporation consider appropriate.
We are all aware that the increased number of members of the governing board will be nominated entirely by the Prime Minister and the City corporation. The powers of those bodies, by virtue of their powers of nomination, will be increased indirectly. The indirect power of elected persons—members of the GLC—are not just being decreased, they are being extinguished. That in itself would give additional powers to the Government, and the corporation, but an additional power is being written into the Bill which we did not discuss a great deal in Committee. The sanction of the Secretary of State and of the City of London Corporation will be required, to acquire or dispose of land or property.
What is more significant is that either of those or both can place limitations on the discretion of the governors in pursuit of that activity. The Minister may tell us that such and such an Act has been passed in relation to other museums or, indeed, national monuments where these powers are inserted. Be that as it may, the Minister has to make out a specific, proper case for increasing the powers of both these authorities. We know that it is not necessarily to be used in a way related entirely to acquisition and disposal.
I imagine that people, when given power, like to use it. I can imagine that the Secretary of State, the Minister, or those who advise him at the third or fourth level, or some people in a committee of the City of London corporation, when asked: "May we buy this land, this warehouse, or that historic house in the City or


elsewhere?" will say "Yes, you may do so as long as …"The "as long as" may set out the conditions which may require that the board of governors should perhaps make a charge or dispose of what are regarded as surplus assets —both are matters which we have already discussed. It may require the Board to do something which it may not be inclined to do otherwise.
These powers do not look great, but could be exercised in a way which would provide less scope for the governors. It behoves the Secretary of State or the Minister to tell us why. The Minister should tell us what he has in mind and the type of condition which may be imposed in these circumstances. Unless he does I do not think we can decide our views on the matter, although in principle, we think the clause should not go through. The case was not made in Committee.
Amendment number 11 relates to the corporation's powers in this respect. Let us suppose that the Secretary of State says, "All right, half the money is coming from me and I can make those conditions." Is there any reason why the corporation should as well? The Minister will no doubt reply, "Ah, but the corporation is providing part of the money, so it should have these powers as well."
That is arithmetically true, but as has been made abundantly clear in this debate, the City of London Corporation is acting for the whole of Greater London in that it is the only London body specifically involved in nominations. It is providing money in an unrepresentative way. The Minister, when he replies, will have to justify his having the powers. But he must make out a specific case for the corporation having them too. Even if there are precedents in other legislations, I would think that these additional powers are unnecessary because the additional members of the board of governors are appointed by the corporation and the Secretary of State.

Mr. Hanley: I believe that the clause as it stands, unamended, is wholly desirable. As we discussed in Committee, the Museum of London is tantamount to being a charity. It is treated as a charity in all legal respects. It is common in charitable law that a restriction is imposed on the distribution, sale or any other disposal of assets especially of land. The doctrine of cy pres should apply. That is that the property should go to the next nearest object of similar worth. I can see that there is a difficulty and that it might be thought desirable for property to go to some other body, but it is only sensible that those who have paid for the organisation should have ultimate control over the disposition of any property that is sold. I doubt whether the Secretary of State or the corporation will be in conflict with the board that they have so carefully appointed.
The clause is wholly sensible and ensures that assets are disposed of only with the agreement of the Secretary of State and the corporation. I see nothing wrong in it.

Mr. Buchan: Will the Minister consider accepting amendment No.10, which provides a small extension? I shall not repeat our arguments on this subject. We have expressed our doubt about the Conservative party and those it will appoint to look after the museum. The Bill is restrictive and amendment No. 10 would facilitate the exercise of the Board's functions by providing that acquisition

will facilitate the exercise of their functions by the Board of Governors and that the acquisition or disposal is in the best interests of Greater London generally".
We have been worried by the narrowness of view that has been expressed generally and which appears to have been taken towards the museum. We are anxious to ensure that Greater London and the region round about is taken care of. I therefore ask the Minister to consider accepting amendment No. 10, if only for the greater comfort of the leigis.

Mr. Luce: I can give a strong assurance that the interests of Greater London will be taken into account.
Amendment No.9 would delete section 3(4)of the Museum of London Act 1965, as proposed in clause 2.That subsection empowers the board of governors to acquire or dispose of land, subject to the consent of the two funding authorities—the Government and the City. The provision which the amendment would delete brings the Museum of London in line with the National Heritage Act 1983, which applies more specifically to the Science Museum and to the Victoria and Albert Museum. It is essential that I, on behalf of taxpayers, who will find half of the museum's costs, should be able to have a say in the expansion of the museum's estate. The plans to acquire or dispose of land are already subject to scrutiny by the funding authorities in considering the museum's annual budget. It is right to include that more formally in the Bill. That is also important from the point of view of accountability.
Amendment No.11 would require the consent of the Secretary of State to the acquisition and disposal of land and property, but not that of the City of London corporation. I must reject that, too, for the reasons that I have already given. It is wholly appropriate for the City, as one of the two funding authorities, to have a say in changes in the museum's estate. As I said, it will already do that when considering the museum's annual budget. It is right to include this more formally in the Bill as well.
The hon. Member for Paisley, South (Mr. Buchan) implied that, if we will not accept amendments Nos.9 and 11, the Opposition would like to impose conditions on whichever Minister is responsible before he is able to consent to the acquisition or disposal of land by the board of governors. That runs counter to the amendment moved by the hon. Gentleman, but I appreciate that the main purpose of the amendment was a probing one. I readily accept that the conditions mentioned in amendment No. 10 are among those on which I and my successors would wish to be satisfied. However, they would be among several factors to be taken into account in the overall responsibility.
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We get into more difficulty if we try to imagine every set of circumstances in which the board of governors would have to take account of the acquisition and disposal of land. It is more sensible to remain consistent with the National Heritage Act 1983, with which the Bill is in total line and which allows for accountability on the part of the Government and the City. With that in mind, I ask the House to reject the amendments.

Mr. Buchan: I am unsure of the position. Do I need the leave of the House to discuss an amendment in the middle of a discussion on other amendments?

Mr. Speaker: The hon. Member can deal with the amendments that I have called—No.9, with Nos. 10 and 11.

Mr. Buchan: My hon. Friend the Member for Newham, South (Mr. Spearing) will wish to put his own view on amendments Nos. 9 and 11. In the middle of this general discussion, I wish to comment on amendment No. 10, to which my name is attached.
It is all very well referring to the National Heritage Act 1983,but clause 2 substitutes section 3 of the Museum of London Act, which gives general powers. When this matter was discussed in Committee, we argued that the remainder of clause 2, because it detailed a number of functions, but not all the possible functions, left open to question whether those functions not mentioned could be ignored. The Minister will remember the argument. We argued that we would prefer general powers to the listing of some powers.
In relation to the listing of some powers, the Minister said that he accepts the qualification as being among several qualifications, but not all. However, he turns our argument back on us and says that he cannot accept the qualification because it could throw in doubt the other purposes with which subsection (4) might deal. He cannot accept proposals regarding subsections (1),(2) and (3),and prevent additional qualifications and purports from being written into subsection (4).The purpose of amendment No. 10 is that it should in the best interests of Greater London generally. To be consistent with the line the Minister has taken of listing several objectives rather than the general powers in clause 3 of the parent Act of 1965, he has compelled us to adopt his philosophy and structure of clause 2 and extend it into subsection (4).
To be consistent with changing a simple eight line general powers section into a long and extended section by including functions, I ask the Minister, for our comfort, to add in subsection (4) that it must be done in the best interests of Greater London. Otherwise, he will be faced with the problem that he tried to argue about in Committee. His argument was that the proposal sets out the objectives and purposes. Everyone is entitled to believe that the fact that the amendment is missing suggests that it need not have been included. We are asking that it is included and we hope that the Minister will reconsider it.

Mr. Spearing: I am not sure of the procedure, Mr. Speaker. Amendments Nos.9,10 and 11 are being taken together because they are on the same point. Amendments Nos. 9 and 11 seek to remove the additional powers that the Bill gave to the Secretary of State and the Corporation of the City of London respectively in imposing conditions on the governors of the Museum of London. Amendment No.10,to which my hon. Friend the Member for Paisley, South(Mr. Buchan)has just referred, is not consistent with the provisions of amendments Nos. 9 and 11. In a sense, my hon. Friend's amendment says that if the Minister cannot accept my measures to delete these power, we should at least insert a safeguard.
I seek your guidance, Mr. Speaker. If I withdraw amendments Nos.9 and 11, will it be possible to put the Question on amendment No. 10? Although I do not like the increased powers given to the Secretary of State and the Corporation of the City of London, especially in view of the increased representation that they already have, and

although I am not entirely persuaded by the arguments on the Science museum, the Victoria and Albert museum and the National Heritage Act 1983,there is some logic in them. Therefore, I do not seek to press amendments Nos. 9 and 11. I hope my colleagues agree that there is some sense in what my hon. Friend the Member for Paisley, South said about safeguards and that we are able to express a view, even if it is negative, on amendment No.10.

Mr. Speaker: If the hon. Member is asking whether I would allow a separate Question to be put on amendment No.10, the answer is yes. Does the hon. Member wish to move amendment No.9?

Mr. Spearing: I beg to ask leave to withdraw amendment No. 9.

Amendment, by leave, withdrawn.

Amendment proposed: No.10 in page 3, line 3, after `State', insert
'and he shall not give such consent unless he has satisfied himself that the acquisition or disposal will facilitate the exercise of their functions by the Board of Governors and that the acquisition or disposal is in the best interests of Greater London generally'. — [Mr. Buchan.]

Amendment negatived.

Mr. Spearing: I beg to move amendment No.12, in page 3, leave out lines 14 to 19.
As I said in Committee, clause 2 has many parts. The amendment will delete new section 8(2), which states:
The Board may allow any premises occupied or managed by them to be used by other persons (for payment or otherwise) for purposes not connected with the Board's functions under this Act if the Board are satisfied that to do so would not conflict with those functions.
The aim of new section 8(2)is to widen the board's discretion in the use of the premises in the way outlined. Normally, one might say that that is a good thing and that it gives more scope and options to the board. However, because of the actions of the Government and, perhaps, of some of their nominees, I am unhappy with the breadth and scope of that measure. Clearly these activities., for which payment may or may not be made, are likely to be entirely outside the museum's purposes.
Those purposes are fairly wide in terms of cultural and other activities. Under this measure the board of governors may, as it were, turn its premises to commercial advantage. The Barbican and the City of London would be ideal premises for all sorts of social or business functions to take place. The Minister will say, "The board must be satisfied that this does not conflict with its functions." There could be much discussion by the board, because, of course, that is a matter of judgment.
If conditions are to be laid down on the sale of property, the Secretary of State may say, as he has said to many local authorities—if he can treat elected authorities in this way, he can treat the board of governors in the same way —"You may do that, but you had better make a bit of money for yourself. You have the power. Advertise and let the property for the price that the market will bear."
Despite the qualification that there must not be a conflict with the functions of the museum, such conflict is a matter of judgment. The commercialisation of the premises would be a real danger. I hope that the Minister will at least give an indication of the thinking of the Secretary of State, if not of the City of London Corporation.

Mr. Luce: The purpose of the amendment is to remove the part of the Act that gives the power to the board to


allow any premises occupied or managed by them to be used by other persons (for payment or otherwise) for purposes not connected with the Board's functions under this Act if the Board are satisfied"—
I stress that—
that to do so would not conflict with those functions.
That is important.
The provision stems from an equivalent provision in the National Heritage Act 1983, which has proved useful in practice. The idea is simple—it is to give the board of governors the option to allow the museum premises to be used for functions, events and so on which are outside the direct objectives of the museum as defined elsewhere in the Act.
The provision allows the board to raise money for the museum by charging for the hiring of its premises for occasional events. I do not see why I should not urge the House to agree that that objective should be encouraged.
In answer to the probing of the hon. Member for Newham, South (Mr. Spearing), I must stress that that power is not confined to the Museum of London, but is already allowed for with other museums such as the Science and the Victoria and Albert museums. I remind the hon. Gentleman that the activities must not conflict with the functions of the board.
It is wholly sensible that the board should have that small degree of latitude, if it so wishes, to allow the premises to be used, if they are not at that time being used for their normal purposes, to raise money for the museum through hirings. After all, such an option is at the discretion of the board of governors.

Dr. John G. Blackburn: Surely that would be a useful and equitable means of raising income for the museum, and, provided that it is within the terms of the clause, it could be a great blessing.

Mr. Luce: My hon. Friend is right. Experience since the 1983 Act has shown that such a provision can be useful. We should give that latitude to the board of governors, provided that it is in keeping with the objectives of the museum.
I ask the House to reject the amendment.

Mr. Spearing: With the leave of the House, Mr. Speaker. I am afraid that the Minister's words confirmed my worst suspicions. In effect, he said, "Let the board make the best use of its assets, even if it is for purposes not connected with the purposes of the museum."
I accept that the Minister said that such purposes should not conflict with the museum's purposes, but if there must be a balance to compensate for the reduction in Exchequer contribution, there could be a possible conflict in the use of the premises. My public library, because of pressure from the Government, has become a disgrace because of the hours that it is not open. It is not used by anyone when it is closed. With any other Government in office I would not have pressed the amendment, but in view of the well-known predilections of both the City of London Corporation and the Prime Minister, if not of the Secretary of State, I feel that the Question should be put.

Amendment negatived.

Clause 4

FUNDING OF GREATER LONDON ARCHAEOLOGICAL SERVICE

Amendments made: No. 13, in page 4, line 5, after `London', insert
'and publishing information concerning such investigations and research'.

No.14, in page 4, line 7, after 'research', insert 'or the publishing of such information'.—[Mr. Luce.]

Mr. Luce: I beg to move, That the Bill be now read the Third time.
We have had about 15 or 16 hours of debate on Second Reading and in Committee and now the Bill is being debated once more on the Floor of the House. The House has shown the importance that it attaches to the Museum of London by the amount of time that it has been prepared to give to scrutinising the Bill. We may not have agreed on a number of issues but, whatever is said, we all wish to see the museum succeed.
We are seeking to make adequate arrangements for the museum's funding and for appointments to the board of governors after the abolition of the GLC on 1 April. I believe that the Bill succeeds in doing that. The Government's strong commitment to the museum is demonstrated by the fact that we have, jointly with the City Corporation, increased the museum's budget for the coming financial year by over 10 per cent.
We have had full debates about the museum's responsibilities towards archaeological services and my right hon. Friend the Secretary of State for the Environment has made it plain that additional sums are being made available to the Historic Buildings and Monuments Commission so that it can undertake archaeological services in conjunction with the museum. Against that background, I express the view that the museum has a great future. That future has been reinforced by the Government's recently announced funding arrangements and by what I hope will be the passing of the Bill.

Mr. Mark Fisher: As the Minister has said, we have had about 15 or 16 hours of debate in considering the Bill. It is not one of the larger measures that the Government are to bring before the House this Session, but it is an interesting Bill. It has given the House and the Committee a chance to discuss various aspects of arts policy, and it is sad that the House seldom has an opportunity to explore and debate them. We have been able to discuss the problem of acquisition and the relationship between the arts and education. We have also discussed the more fundamental issues of accountability and general policy and attitude towards the arts. For that reason—that of lack of opportunity —the the House has welcomed the chance to enter into these debates. It is sad, however, that the opportunity arises in considering an extremely ill-judged and ill-conceived Bill.
Our consideration of the Bill has provided us with the chance to hear the views of a newly appointed Minister, and we have had the opportunity to assess him. We welcome him in his new job and welcome specifically the fact that we have a Minister with responsibility for the arts


who is answerable in this House and with whom we can debate and discuss arts policy. That is something that we lacked for two years prior to his appointment. We also welcome the Minister's flexibility in listening to our arguments in Committee and amending the Bill tonight. However, despite those quiet and modest gestures of approval, it has been clear during the passage of the Bill that the Minister, for all his kind words and solicitations, is as hamstrung and straitjacketed on arts policy as his predecessor was by the Government's ideology and determination to subject the arts to pressures and rigours to which they are not suited, and in pursuance of which it does not best serve the British people —neither the audiences nor those who live and work in the arts.
Although the Bill is small it has been extremely important, both for the museum and the Government's general policy towards museums. It is undoubtedly a bad Bill, and wholly unnecessary. It flows from the Government's vindictiveness towards the Greater London council. Because the museum was but a small part of the GLC's functions and work, the Bill has received precious little thought from the Government. I am sure that when the Prime Minister took it into her head to attack the GLC, she little knew that one of its powers and functions was to oversee the heritage of our capital city—its archaeological, industrial, social and cultural archives and records which reside in this excellent museum. She did not know and certainly did not care about that. Therefore, when it dawned on her civil servants and Ministers that, as a consequence of her determinaton to abolish the GLC, the Government would have to deal with the museum's governorship, the Government had to cobble together this little Bill to amend the Museum of London Act 1965. As a result, this is an ill-considered Bill, and will do nothing to improve the governorship, management or future of the museum.
All hon. Members know that it is a museum of London. Therefore, logically, it should be controlled by democratically elected representatives of the people of London. All hon. Members are democrats and know that that follows from the inevitability of having a museum of London. The only sensible way to administer it is through democratically elected representatives, which is how at least part of the governorship of the museum has always been in the past. But the Bill is removing that one democratically elected representative part of the governorship which has a direct interest in and accountability to the people of London. In doing so, the Government do no favours to the museum or the people of London.
All hon. Members know that that is true, and that the management and administration of the museum to date has been extremely good. When the Minister replies I defy him to say how the Bill can possibly improve the quality of the museum, or of its accountability to the people of London. Because of the museum's good management, it may continue as well as before, but the Bill does not improve the quality of the museum. The Government have been meddling in the administration of the museum simply because of their vindictive attitude towards the GLC. That cannot be a good reason to alter the governorship, powers and functions of the museum. The Minister knows that that is the case. In Committee he could not give one way in which the Bill would improve the museum, and he knows that it will not do so. The Bill does not improve the museum one jot or tittle.
The greatest nonsense of all is that, because of the absurdity of having to introduce the Bill, the Government have found themselves turning their own policies on their heads. The Government are determined to cut expenditure in every area but because of this Bill they are increasing Government expenditure on the Museum of London.
The Minister has come before the House and the Committee saying how good and virtuous the Government are and how well intentioned they are in planning to spend £2·5 million a year on the museum in the future. That is an increase in the museum's overall budget of 10 per cent. The Opposition welcome that and thank the Minister for it. We hope that that increase will continue in subsequent years. However, the Minister has not told the House that that £2·5 million is a much greater sum than the Government contribution to the museum last year. Therefore, we have the absurdity of a Government committed to cutting Government expenditure having to increase Government expenditure on the museum because of their facile and stupid attitude towards the Greater London council. There cannot be any greater absurdity for the Minister for the Arts to find himself in.
For all the kind words, concern about standards and intelligent interest in the conditions of the museum arid its future which the Minister expressed in Committee, the truth is that the Government's basic philosophy towards the arts, not only their political philosophy towards local government and democratic representations in London, is not consistent with a good, sane and improved administration of the arts.
The arts should not be solely for the market place. There is a national and public interest in the arts and in our culture which goes beyond that. That is something which the Government have missed and not understood in the Bill and because of that, the Bill brings no credit to the Government. I am sure that the Bill will be repealed by a future Labour Government when they return democratic government to London.

Mr. Hanley: It would be wrong for the Bill to pass to the other place without a tribute being paid to those who work in this excellent museum. One of the great advantages of being selected for the Standing Committee was the opportunity, which many of us took, to visit the museum and see it with a fresh mind. It was a great privilege to be able to see behind the scenes. However many times many of us may have been to the museum, it had previously been impossible to see behind the scenes.
The museum is an iceberg. It may be a cliché to say one eighth above water and seven eighths below, but that is true of the museum, in that the artefacts on display are but a tiny proportion of the total amount of paintings, prints and relics which are lovingly restored and lovingly catalogued. They left a deep impression upon me. The way in which the people work behind the scenes with such great dedication is something of which the people of London and the country should be proud.
When I visited the museum there were only two matters pressed upon me by those who wished to discuss the impending Bill. Those matters were not political, but sensible alterations or clarifications to the Bill. The first was that we should have regard to the contribution of the London boroughs in appointing people to the board. That has been guaranteed by my right hon. Friend. It is not just


a museum of the City of London. It is a museum of London, of all its people and the area around London. That has been clearly set out by my right hon. Friend.
Secondly, the people at the museum wanted to ensure that the archaeological side of the museum would be guaranteed. It has been, and is consistent with the other powers of the board of the museum. I am grateful to my right hon. Friend for what he said in that regard.
There is a third matter which is one of my own. I had hoped that a report might be presented, at least once every three years, or more if circumstances determine, because of extra funding. I am glad that my right hon. Friend has said that that will be dealt with in another place. I am grateful for the extra funding which the Government are providing for the year to come.
The Museum of London shares in the honour that my right hon. Friend received. No doubt the idea of making my right hon. Friend a Privy Councillor was swayed by his appointment as Minister for the Arts. It is a tribute to the way in which Conservatives view the arts that he has been so elevated. Therefore, on the Bill passing to the other place, I congratulate my right hon. Friend the Minister for the Arts and the Government on their commitment to the historical arts of London.

Mr. Tony Banks: That was a brown-nosed job of a speech, but it was made in that wonderful voice that the hon. Member for Richmond and Barnes (Mr. Hanley) has, which no doubt will guarantee him future appearances on party political broadcasts for the Conservative party.
When I saw the Leader of the House come in, I thought that we would have the tumultuous news that the abolition of the GLC was just an ugly rumour, but I now realise that the right hon. Gentleman is probably more interested in the speech on the Adjournment, which is perhaps nearer to his heart than are the arts. That is on his own admission. He has said that he is probably the worst philistine in the House. It is a brave claim, even for the Leader of the House, given the company he keeps.
The Bill is one of the easier aspects of the abolition of the GLC.I correct the Minister. The GLC will be abolished at midnight on 31 March. It is the Government who take over on All Fools' day on 1 April, not the GLC. Although the Bill is one of the easier aspects of GLC abolition, in other areas of the arts in London the consequences are likely to be more fraught and dangerous. We have heard talk about Sadler's Wells. If the Minister for the Arts wants to show his total commitment to the arts, let him, even at this late stage, make an announcement when he speaks on Third Reading that the Government will step in with the necessary funds to save Sadler's Wells. That will be the way of guaranteeing that this otherwise largely unreported debate will get some coverage tomorrow morning. Let us see whether the right hon. Gentleman would like to reach out for that.
There are problems not only with Sadler's Wells but with the Half Moon, the Theatre Royal in my constituency, the Riverside, the Tricycle, the Warehouse, and all the many small theatres, particularly in community and ethnic arts. They will suffer because of the abolition of the GLC. The Greater London Arts Association has estimated that between 25 and 100 bodies are likely to go because of GLC abolition. No one can quantify the

number. However, the Bill represents an easy part of abolition. The Minister will have many more pressing problems on his plate from 1 April. I do not think that he will have such an easy ride when he deals with those aspects of GLC abolition.
My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) said how strange it was that a Government who advocated the abolition of the GLC, at least on one ground, that of cost, now find that they have to dig deep into the public purse to pay for services and interests previously maintained efficiently and effectively by the GLC on behalf of Londoners. I suspect that, as with the problems for the arts, problems about the public expenditure consequences of GLC abolition will come back time and again to haunt the Government before their demise at the general election.
I shall always seek to catch your eye, Mr. Speaker, to rub in the message on GLC abolition long after 31 March when it has been abolished. However, this evening we are dealing with a small aspect of the abolition of the GLC.I join the hon. Member for Richmond and Barnes and my hon. Friends in wishing the Museum of London well in future. The future is no better now than it was when the GLC was partly responsible for the museum's affairs. I pay great tribute to the role of the GLC and to the support that it gave to the museum.
I give particular credit to the GLC nominees on the governing body of the museum. I remind the Minister once again that those nominees were not selected on the basis of the Prime Minister's dictum, "Is he one of us?" They were selected on a cross-party basis and included Tory as well as Labour nominees. I hope that the Minister will bear that in mind when he appoints the governors after the Bill has received Royal Assent. I hope that he will also bear in mind the service rendered by the GLC nominees, both Conservative and Labour.
We shall have to return to this matter in a few years' time. After the election of a Labour Government, the restoration of citywide democracy and the abolition of the City of London, we shall have to look again at the functions of the Museum of London, and in particular at its board. We shall remember this evening. The Opposition wish the Bill well in another place. It is a necessary Bill, because of abolition, and we do not wish to oppose it.

Mr. Murphy: I rise in support of my right hon. Friend the Minister for the Arts. I, too, wish this measure to be enacted. During the Second Reading debate on the Museum of London Bill I referred to private sponsorship of the arts, which is relevant both to the heritage and to the Museum of London. It may be of interest to those hon. Members who were present on that occasion to know that, subsequent to the adoption of my report on this subject by the Parliamentary Assembly of the Council of Europe, a favourable response has been received from the Committee of Ministers. It shares the view that
the potential resources for cultural financing can be increased by combining state and private efforts.
In the opinion of the Committee of Ministers, such a combination has been made especially relevant as member states seek the most effective use of the resources that are available for culture and turn increasingly to forms of co-funding with other bodies. However, despite such


collective wisdom, which embraces Governments of differing political complexions, the Committee stage of the Museum of London Bill was—

Mr. Speaker: Order. I take it that this is a preamble to what the hon. Member intends to say about the Bill.

Mr. Murphy: You are, as ever, absolutely right, Mr. Speaker. Despite that recognition of the importance of co-funding, the Committee stage of the Bill was accompanied by a great deal of Socialist dogma and anti-capitalist rhetoric. The partnership between the Government and the Corporation of the City of London is exactly the type of partnership that should he encouraged in both the public and the private sectors.
During the passage of the Bill attempts have been made to denigrate the Government's commitment to the arts and to the heritage. The Socialists have again adopted the ploy of trying to turn myth into fact. That should be exposed for exactly what it is— misrepresentation.

Mr. Banks: Will the hon. Gentleman give way?

Mr. Murphy: I shall not give way to the hon. Gentleman. There was enough to-ing and fro-ing in Committee for us to know exactly where all hon. Members stand in their commitment to the arts and the heritage. I see no reason for the proceedings of the House to be held up once again. I believe that the Bill will assist the Museum of London. It will also assist the people of London and my constituents who live outside London. I wish the measure well.

Mr. Buchan: I rise to make the last Opposition speech before the Bill goes to the House of Lords, where I suspect many amendments will be made to it.
This is not a happy occasion. Indeed, it is a very sad one. It is the first measure to have emerged after the introduction of the stupid, malevolent and ill-thought-out concept to abolish the Greater London council and the metropolitan counties. It has been done out of malevolence and pique, and without considering most of the consequences that will flow from abolition. Above all, it was done with no consideration of how properly to replace any democratic say in the various institutions of London. The Museum of London is only one aspect but it is a serious sign that the Government intend to maintain this undemocratic approach throughout the many other problems that will arise.
Several hon. Members have referred to the fact that we have had between 15 and 16 hours of discussion. One of the problems was the interminable intervention of Conservative Members, which limited the useful discussions of the Opposition. We accept that some hon. Members—even in Committee, difficult as it was to discern—may he interested and concerned in the arts. I go further. I believe that the new Minister, perhaps without any direct experience, is learning fast. I think that he learned during the course of the Committee. Attention has been drawn to the desire to bring in the London boroughs and to emphasise archaeological aspects. That largely stems from pressure that we brought to bear. While at the end of the day amendments were not required, there was a commitment that we welcomed.
We have been accused of making nothing but anticapitalist statements. In fact we have brought a change of tone and attitude towards the Bill. We have even

recognised Government amendments. To talk about anticapitalist remarks reminds me of Karl Marx's comment that the bourgeoisie built statues to the great writers of the past but that if they had ever read their books they would have burned them. We congratulate the Minister on his first venture only because it is his first venture, not because of the nature of the Bill.
A number of issues still face us in relation to the arts in Londong. The narrowness of view in relation to the Museum of London has borne fruit in recent weeks. At the time of abolition, both of the metropolitan authorities and the GLC, we warned that among the areas of our life that would be in deadly trouble were the arts. Pledge after pledge made by the previous Minister and repeated by the present Minister, maintained that the arts were in no danger and that funding would be brought forward to replace the funding that would be lost from the metropolitan authorities and the GLC.
Of course, it was said that there would be cuts. Of the £20 million that was required, £4 million would come from the boroughs. That proved to be a complete misunderstanding — an under-estimate. In fact, even with the additional £10 million for the arts, there is still a £19 million shortfall. The Arts Council says it needs £10 million because it knows it will not get the £9 million from the Government.
We are seeing the consequences. The Government say that they are under-funding deliberately because the successor bodies will come forward to support the arts, yet the first thing that happens is that no successor body—no borough, no council—is represented in the first piece of legislation. That is some evidence of what can be done by the successor councils when they are treated with such contempt.
But the Government know and we know, and events have proved, that what we said was right. Local councils have had their rate support grants cut and have been rate-capped. Indeed, it is those who are most generous towards the arts who have been subjected to rate capping. They cannot replace the funding that came from the metropolitan authorities and the GLC. We hear the Minister saying that he is proud of the £2 million-plus that the Government and the City of London have added. Yet it is astonishing that the Government have been led into additional expenditure which they did not think about when they abolished the GLC. We must remember that the rest of the arts remain in trouble.
The Museum of London has been saved but the Government have, for example, plunged Sadler's Wells, with its 300 years of theatrical history, not only of national importance and fame but international importance and fame, into closure. It is unthinkable, but it will happen. We have seen the Cottisloe theatre close, and now Sadler's Wells will go. We know that in the north-east, the Empire in Sunderland, the royal theatre in Newcastle, and the royal philharmonic hall in Liverpool are also in bad trouble. This is linked to what the Bill will bring about. The two things are integrally linked because they stem from the same narrow, petty, mean-minded attitude of the Government. We are seeing the apotheosis of Mammom and a growth of Philistinism.
We hope that—

It being Ten o'clock, the debate stood adjourned. Ordered,


That, at this day's sitting, the Museum of London Bill may be proceeded with, though opposed, until any hour. —[Mr. Neubert.]

Question again proposed, That the Bill be now read the Third time.

Mr. Buchan: We hope that the other place will improve the Bill.

Mr. Tony Banks: I am grateful to my hon. Friend for giving way. I have been trying to catch his eye, but it is rather difficult when he speaks with his back to me. He spoke about the City of London. Many things have been said about its role and the additional money that it is making available to the Museum of London to match the Government's increased contribution. My hon. Friend will be interested to know that the City of London, already the wealthiest borough in London, will make a considerable amount of money out of the abolition of the GLC. This is because a number of new schemes will be carried out on a per capita basis, and as the City has only a small population, it will benefit enormously in terms of a reduction in its contribution. Even the additional money that it is giving to the Museum of London is not an act of generosity but is paid out of profits that will accrue because of the abolition of the GLC.

Mr. Buchan: My comment about the apotheosis of Mammon was right.
The multitude of arts bodies that have been supported by the GLC, both small and professional, such as the ethnic and community arts and theatres such as the Half Moon and the royal theatre in Stratford are in London, but there are others beyond London.
We cannot take too much pleasure in the £4 million-plus going to the Museum of London. We are pleased that the Minister has secured that money, but we are displeased with the undemocratic and unrepresentative nature of the museum's governing body that he has inherited and will now establish. Will he take back the message to his mistress that the biggest single act that she could take, both to win our co-operation on the Bill and, more importantly, to save the arts in Britain, which are such a ferment of fear and anxiety, is to restore the money lost to the arts through the Government's ill-conceived schemes?

Question put and agreed to.

Bill accordingly read the Third time and passed.

PROTECTION OF MILITARY REMAINS BILL

Ordered,
That the Proceedings of 31st January in Committee and on Third Reading of the Protection of Military Remains Bill be null and void.—[Mr. Biffen.]

Scotch Whisky Industry

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]

Mr. Malcolm Bruce: I am extremely pleased to have the opportunity of this debate, particularly as events in the Scotch whisky industry are so topical. However, the debate is on the industry and not just the immediate developments in it.
The Scotch whisky industry has had a difficult few years. Volume sales have declined from a peak in 1979. The number of distilleries has reduced since then from about 130 to 100, and employment has fallen from over 25,000 to about 16,500. While smaller companies have performed fairly well, especially those selling single malt whiskies, the industry leader, Distillers, has generally not done well, and the facts show it.
The industry is obviously extremely important, to Scotland, but it is also important to the whole of the United Kingdom. It provides manufacturing jobs, many of them in areas where there is little or no alternative, and it still represents a major export industry, with sales approaching £1 billion a year. It is important to maintain and develop its employment and export potential.
The recent developments began in the middle of 1985, when Guinness took over Arthur Bell and Sons plc for £356 million and so acquired the top domestic brand of whisky. The Fosters lager consortium, Elders IXL, has put in a bid for Allied Lyons, which includes William Teachers, whose two distilleries are in my constituency. Teachers is the second largest United Kingdom brand. That bid has rightly been referred to the Monopolies and Mergers Commission, involving as it does the acquisition of a key product by an Australian group, which must be examined carefully in this strategic industry.
It is not surprising that bids and counterbids have been launched for a company such as Distillers, which seems to be under-achieving its potential under its present management. The first bid came from James Gulliver's Argyll Group, which offered £1·89 billion. When the bid arrived, there were calls for it to be referred to the MMC. On competition grounds that did not seem to be justified, but in relation to the strategic national interest the bid warranted at least deep consideration about whether it would secure jobs and promote exports.

Mr. Alexander Pollock: In that context, does the hon. Gentleman recall the words of my hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the Under-Secretary of State for Trade and Industry, who said that in addition to competition there might be referrals
where the destiny of a vital national capability is at issue?

Mr. Bruce: I am grateful to the hon. Gentleman for mentioning a factor that must be considered in all bids. I am anxious that the bids are treated equally and fairly and that similar considerations are applied in all cases. That is the critical factor.
Nevertheless, the Argyll bid was cleared. Then Guinness made a bid, which was agreed with Distillers —it invited Guinness in and offered to pay its expenses —for £2·19 billion. If that merger were to go ahead, it would create a group that accounted for 35 per cent. of the whisky market. There is a dispute as to how much whisky


production that group would represent, but it is between 35 and 50 per cent.—probably nearer to 35 per cent. The group would also own, as Distillers still does, 50 per cent. of United Glass, which accounts for half the sales of bottles to the whisky industry.

Mr. George Robertson: When the hon. Gentleman produces statistics about the capability of the Distillers-Guinness conglomerate, will he take into account the spare capacity that is available to Distillers and not rely on a suggestion of actual output? Distillers has a considerable amount of capacity which is at present unused but which could come back on stream.

Mr. Bruce: I am grateful to the hon. Gentleman. I intend to deal with the point later.
As Guinness has acquired Arthur Bell, it would, with Distillers, become a bigger group than Distillers alone and would be bigger than a Distillers group owned by Argyll. That presents a dilemma, because it is difficult to believe that a bid to create such an enlarged group should not be referred to the Monopolies and Mergers Commission, although the Government may take a different view. However, if that merger is referred, it would leave Argyll clear and free in the market and would handicap Guinness. Not to refer it would undermine the credibility of the Office of Fair Trading. Could it say, "We will not refer this bid because we did not refer the Argyll bid; but had there not been an Argyll bid, we might have referred it"? We must have a clear statement, whether or not the bid is referred, of the reasons for so doing. The Minister and the Government must take that point on board.
That clearly leaves the Government with limited options. If the Guinness bid is not referred to the commission there must be a clear explanation for that, as it is difficult to see why it should not be referred. If there is a good reason, it should be made available.
If, on the other hand, the bid is referred to the commission, the Ministers responsible have two further choices. They can either review the decision of Argyll on the ground that they need to consider all the implications for the industry and it would be fair to consider both bids at the same time, or they can state, as this would be the effect of their decision, that they are effectively endorsing the Argyll bid, at least by implication, and explain that they are happy for that to happen. How the bids are referred and judged should not be left to luck. Both bids have every right to be treated fairly. All the factors, jobs, exports, management potential, the merits of the bid and the implications of competition should be considered equally for both bids.
The sheer scale of these bids and the wide issues that they raise require a clear statement by the Government of their position. I do not think that we can accept a "hands off" approach, unless it is a genuine "hands off" approach. There should be no under-the-counter meddling over the decision to refer or not to refer. That would have a perceived effect, and that fact must be taken into account.
It is unfortunate for those of us who are caught in the middle of these battles that they frequently degenerate into an argument between the management of the two different companies. There are claims and counter-claims, which does not add to the clarity of information on both sides. The merits of both companies are such that there is no doubt that if either of them were to take over Distillers there would be a re-invigorated whisky industry, using the

brands to lead a new attack on the export market. That would be desirable. It is important that the relative accounts of both companies are considered.
Argyll launched its bid with an attractive statement—attractive to me as a Scottish Member—which claims that the company will bring Scotch whisky back home. It would establish a new company in Scotland. Its management team would be based in Scotland and the industry would be run from there. Argyll claim that its management team has a marketing background which can revitalise the industry, and it feels that its actions are a logical development of its own business.
Guinness countered that by claiming that it had greater international marketing expertise which would be much healthier and better for the industry. It also claimed that it would establish headquarters in Scotland. We should be grateful that there now seems to be renewed enthusiasm for operating international businesses within Scotland. All Scottish hon. Members will be glad to see that it seems from that point of view that we cannot lose. We shall get an enlarged whisky management group in Scotland.
I should not at this stage take sides in the issue other than to ensure that a fair deal is secured. I accept that the Scotch whisky industry needs a boost and injection of new creative management. It needs aggressive and creative marketing. I am looking for, and I believe that the Minister should want, a commitment to centering employment and management in Scotland and to securing the quality of Scotch whisky as a product and to ensuring that it is backed with effective, creative marketing to beat off the challenge it has suffered from its competitors, namely white spirits, white wine, brandy and so forth.
Although it may be invidious to mention the two together, I think we can learn something from the way the producers of Armagnac and Cognac have established the imprimatur on their quality product in a way which Scotch whisky could benefit from if it is to establish itself as top of the heap.
One of the difficulties in relation to white spirit in competition with Scotch, which will lead me to make specific recommendations at the end of my speech, is that there is, of course, no ageing process, no skilful blending and no mystique. One can make gin today and sell it effectively next week. There is no difficulty involved in forward planning, no expense in stock holding, and no creative skills are required. Yet, in the long run, that is not in the best interests of Scotland or the United Kingdom. It would certainly not create jobs in rural Scotland and it does not have the export potential that whisky has, as gin can be made relatively easily almost anywhere. Pure, good quality Scotch whisky can only be made in the right circumstances, in the right place—in Scotland.
The Scotch whisky industry is vital to rural communities and towns in Scotland which have blending and bottling plants. Teachers has its only two distilleries in my constituency and employs 50 people in two relatively small communities. Distillers had a distillery in my constituency but closed it many years ago. I am pleased to say that Morrisons of Glasgow took it over and not only generated employment by producing malt whisky but produces tomatoes and house plants from the waste heat. The company has generated some imaginative tourism on the back of those products.
The importance of the industry to rural areas can be explained by the example of a minister whom I met. He told me that he went for a charge in a rural parish and was


asked, "Do you take a dram, minister?" Normally, a minister would assume that the correct answer was no. On this occasion he would have been wrong because the parish was entirely dependent for its employment on a malt whisky distillery. Fortunately, the minister gave not merely the right answer but the honest answer. He admitted that he took a dram and finished up with the charge.
After considering the points that I have made about the two bids the Government should make their position clear. That is critical. They should ensure that they take account of the interests of Scotland and the United Kingdom market. They should treat the bids fairly and evenhandedly and explain their position clearly.
There are three further things that the Government should do for the Scotch whisky industry. I should like to address those points to the Minister. The Government should recognise their responsibility to work with the industry to ensure a good quality product. As the Minister will recognise, a definition of Scotch whisky is required by law. The ageing process is required by law. There are one or two further areas where legislation could strengthen and develop the Scotch whisky industry.
The first point is controversial. The Government should legislate to ban the export of bulk malt whisky. I accept that some distilleries would have some difficulties as a result, but I believe that it would protect the quality of our market. We export bulk malt whisky to Japan where it is blended with the local inferior product so as to pass it off as a more acceptable product. The result is that it is harder for Scotch whisky to penetrate the Japanese market. We face the possibility of the Japanese launching a major export assault on third markets using as a base bulk malt Scotch whisky. That is nothing like as advantageous as us selling Scotch whisky to those markets. In the long term such legislation would be in the best interests of the quality of the product and the market.
The Government should insist that the legal definition of Scotch whisky should provide that it should be full strength, at least three years old, distilled, matured, blended and bottled in Scotland and contain a statement of the percentage of malt whisky included.

Mr. George Foulkes: No.

Mr. Bruce: I understand the hon. Gentleman's anxiety and I appreciate that it is an important constituency point. Such a quality product would enable the whisky industry generally to be extended to everyone's benefit.

Mr. Foulkes: rose—

Mr. Bruce: I must press on, because the Minister needs time to reply.
I know that the Minister will have to consult her colleagues on these points, but these are important issues. The Government should re-introduce stock relief to the Scotch whisky industry. The abolition of stock relief was effectively a tax on the quality of Scotch whisky. Scotch must be matured for three years. The cost of that three-year maturing process is estimated to be £53 million in lost stock relief. That £53 million would be much better deployed within the industry expanding the market. The re-introduction of stock relief would be to the Government's advantage.
I do not believe that the position of the Scotch whisky industry was appreciated when stock relief was abolished. It put Scotch whisky at a disadvantage compared to competitive products when it was facing a major assault from those products.
I urge the Minister to explain to her colleagues that Scotland feels that it should have a thriving and developing Scotch whisky industry, and they should recognise that bids of the scale that we are now witnessing fall, effectively to be the Government's responsibility. They should ensure that all the strategic considerations are taken into account, that the bids are treated fairly and equally and that Scotland obtains the best possible Scotch whisky industry, with local management, control and ownership and growing export sales. That is what we want, I hope that the Minister will be able to give answers which show that the Government are prepared to take on board their responsibilities and ensure that that is what we get.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): One of the delights of my job in the Ministry has been the opportunity to visit some of those fine Scottish distilleries, so I welcome this opportunity for a debate on the Scotch whisky industry. The hon. Member for Gordon (Mr. Bruce) has paid tribute to the industry as well as challenged it, and I wholeheartedly endorse what he has said. The Government fully recognise the importance of this industry as an important source of employment—some 16,500 jobs, many of them in disadvantaged areas—and as one of the United Kingdom's top five net export earners, the value of exports last year having topped the £1 billion mark. At home, the industry is very important, making a similar level of contribution to the revenue. There can, therefore, be no question but that the Government fully recognise the important role of this industry in the country's economy.
I recognise, however, that the hon. Member, in seeking this debate, is concerned at current trends in the industry and especially the effect of several recent major bids. As the House well understands, responsibility for monopolies and mergers policy does not rest with my Department. The Ministry, however, has responsibilities for the Scotch whisky industry and that is why I am pleased to reply to this short debate. As regards competition policy, as my right hon. Friend the then Secretary of State for Trade and Industry made clear in a statement in this House on 5 July 1984, references to the Monopolies and Mergers Commission would be made primarily on competition grounds. "Primarily" does not of course exclude other considerations. For example, the major consideration behind the recent decision to refer the bid for Allied-Lyons plc by Elders IXL Ltd., was the method of financing, which was thought to raise issues deserving of further consideration. On the other hand, the decision not to refer the Guinness bid for Bell's and Argyll's bid for Distillers was guided primarily by considerations of competition.
I know that there has been comment on these decisions. Reference decisions, whichever way they go, often arouse controversy. I do not want to stray too far into the responsibilities of my right hon. Friend the Secretary of State, but I should point out that there were significant differences between the financing of the Elders and the Argyll bids which led my right hon. friend to his different decisions on the need for a reference.


The hon. Member has also raised the question of a possible referral of the recent Guinness bid for Distillers. This decision of course rests with my right hon. Friend, the Secretary of State for Trade and Industry. He will take that decision on the basis of advice submitted by the Director General of Fair Trading. It would not be appropriate for me to anticipate that decision or to comment on the matter at this stage.

Mr. lain Mills: Surely Guinness should have the same chance to bid to the shareholders as Argyll?

Mrs. Fenner: I have made the point that this is a matter for my right hon. Friend the Secretary of State. I have no doubt that the Secretary of State will be aware of the question of balance that has been put by my hon. Friend.
As the hon. Member for Gordon will be aware, my hon. and learned Friend the Parliamentary Under-Secretary of State with responsibility for corporate and consumer affairs, the hon. Member for Folkestone and Hythe (Mr. Howard), has announced that a review of the Government's competition policy will begin this year. The precise scope of the review has not yet been finalised but will be announced in due course. In the meantime I am sure that the interesting points made in this debate by the hon. Member will be considered in the review.
The hon. Member has mentioned several problems which are worrying the industry. As he is aware, the distilling sector working group of the National Economic and Development Office, which includes representatives of the industry, Government and the trade unions, has carried out a wideranging review which was published as recently as October 1984. This followed an earlier review in 1978. Matters have been examined carefully in a short time. The report identified all the major issues of current concern to the industry, several of which the hon. Member has mentioned, and made recommendations for action by Government and the industry during the next five years. We are still very much involved in implementing these recommendations and, of course, we are ready to play our part with the industry in tackling any new issues that may arise.
The possibility of the Government restricting bulk exports, particularly of malt whisky, has been suggested because of the benefits that would bring to the UK in employment and in other respects. I should point out that this issue was examined in the 1978 report, which concluded that the industry was insufficiently united voluntarily to regulate its bulk exports, while Government were restrained from such action by their international commitments under the GATT and by Community obligations. The 1984 study reached similar conclusions. Nonetheless, its analysis suggests that such exports have tended to stabilise around the 1978 levels, and figures just released in respect of last year's exports show a substantial fall in this trade. I am sure that that will reassure the hon. Member.
As for the abolition of stock relief in the 1984 corporation tax changes, the Government are well aware that because of its large stocks of maturing whisky, the Scotch whisky industry has been particularly affected by these measures, although in the longer term, as

corporation tax rate falls, the industry should pay slightly less tax even without stock relief than it did before the 1984 changes.
In his decisions on taxation at the last Budget, my right hon. Friend the Chancellor of the Exchequer recognised the difficulties faced by the industry. I cannot of course anticipate the decisions that he will take in this year's Budget, but I am aware that the Scotch Whisky Association has made detailed representations.
The Government are working closely with the industry in several areas in which there is agreement that progress can be made. For example, the Government are currently considering proposals for whisky definitions to be prescribed in new regulations under the Food Act 1984. Any proposals will be subject to the usual consultation with all the interests concerned. We are also giving strong support to Community proposals laying down clear definitions of the spirit drinks most commonly traded within the Community. The industry is keen for the enactment of measures which should help the competitive position of Scotch whisky in export markets. We shall aim to press ahead with these proposals during our Presidency of the Community in the second half of this year.
We maintain regular and close contacts with the industry on the trade barriers it faces throughout the world and we pay special consideration to its efforts in the far east. The Government also have the interests of the industry very much in mind in their approach to the EC Commission's proposals on the harmonisation of the structure of duties on alcoholic drinks. Our joint aim is to help establish fairer terms of competition for the industry throughout the Community.
I know that the Scotch whisky industry has been through a difficult period during the past six years. World recession, coupled with changes in drinking fashions, has contributed to a drop in sales in many key markets. I would not, however, like to conclude on such a pessimistic note, which would not, I think, reflect current attitudes in the industry. In the past year or so, the industry has made substantial efforts to bring maturing stocks more into line with sales expectations. There is also some evidence now that the decline in world sales may be taking a turn for the better. In the domestic market, there was a 6 per cent. rise in consumption in the first nine months of 1985 as compared with the same period in 1984, with considerably greater growth in the as yet small malt whisky market. These are encouraging indications which we hope foreshadow a sustained improvement in the industry's performance to the benefit of the whole economy.

Sir Hector Monro: Will my hon. Friend bring home to my right hon. Friend the Chancellor the strength of feeling in the debate and the number of hon. Members who attended it? We want a revitalised Scotch whisky industry. The only way in which there can be a dramatic improvement in the near future is through budgetary measures. I hope that my hon. Friend will bring that point home to my right hon. Friend the Chancellor.

Mrs. Fenner: My hon. Friend puts his point very clearly.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes to Eleven o'clock.